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Cofunds sees profits falls 17% to £6m

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Departing Cofunds chief executive Martin Davis

Legal & General-owned platform Cofunds has seen pre-tax profits fall 17 per cent to £5.9m in 2012, down from £7.1m in 2011.

Assets under administration on the platform grew 33 per cent to £47.6bn, up from £35.8bn the previous year.

Despite the growth, the firm’s accounts say directors see AUA as lower than expected although they say it is satisfactory in current market conditions.

Cofunds’ current AUA stands at around £55bn.

Turnover increased 5 per cent to £73.8m from £70m in 2011.

The platform adds it expects market conditions to remain challenging while it also remains in discussion with the Financial Conduct Authority over the effects of incoming platform rules.

A statement in the firm’s accounts says: ”The group expects that existing competitors and new market entrants will continue to provide strong competition and consistent with the broader economic environment, market conditions wil remain challenging.”

L&G completed its £131m acquisition of Cofunds in March following months of negotiations between the firms.

Following the deal, a number of senior Cofunds staff have announced their departures. 

The departures include chairman Charlie Eppinger, chief executive Martin Davis, head of operational services Stephen Mohan and director of marketing Verona Smith.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. By my calculations £70m from £36bn = 19bps, £74m from £48bn = 15bps. A combination of competition, RDR and institutional assets. See here for more spooky predictions: http://altus.co.uk/white-paper-the-platform-machine-tuning-for-efficiency/

  2. Stephen Wynne-Jones 7th June 2013 at 3:18 pm

    The context to our results is at this link
    https://blog.cofunds.co.uk/?p=4975

    We think it’s a solid performance while we invested in IT for RDR, and supported our clients through monumental change.

    How many other platforms grew sales and made £6m profit during RDR?

    We still have lots of work to do, but these results aren’t doom and gloom.

    Stephen Wynne-Jones
    Head of Marketing
    Cofunds

  3. Following the fallout on Twitter. My goodness … lessons on how not to represent your company on social media! It would be advisable to be dignified and not react with such a defensive attitude so publicly.

  4. @Stephen Wynne-Jones

    “…..supported our clients through monumental change…” You did what? Not where I’m standing!

    1. I was badgering Cofounds to let me know precisely what proposition they had on offer from the start of 2012. All I got was if’s and maybe’s. My clients have always had the choice of paying my funds under management charge directly or have it taken from the platform. I was assured that pro rata sell down would be an option – right up to November 2012. Finally your daft proposition appeared. Sell down form the largest fund or take from the income. What a crackpot way of doing things. Then I was told – “Don’t worry you can do model portfolios and then do pro rata sell down”. I don’t do Tesco type investments for my clients – they all get bespoke.

    2. Then we get a drop off of service which I found monumental. Right up to mid-2011 I found Cofounds a great firm to deal with. Excellent service from a dedicated point of contact. Now you’re lucky to be able to get hold of anyone. God knows what they do, but they are invariably on voicemail and away from their desks. Call centre? Not bad as far as it goes, but you never speak to the same person twice and are often shuffled from department to department if the enquiry isn’t ‘vanilla flavoured’.

    3. You also seem unable to get your head round the fact that not everyone segments clients. Some of us ‘segment’ at outset. i.e. if we don’t value the prospect we don’t take them on, but once a client we feel that everyone deserves of our best. Why should we give some clients a lesser service? Everyone’s money is important to them.

    4. Transferring off platform? How about this then? “Cofunds completed the transfer on 9th April (After receiving the applications in February), but only issued the Stock Transfer forms to the fund managers on 21 May” I have been submitting transfers steadily since the start of the year and not one has been completed as I write. I am well aware that you will also seek to place as much blame onto the receiving platform as you can, but undeniably much of the delay is down to you.

    This is of course is only a brief selection.
    If this is what you think is support, perhaps you need to descend from your Ivory Tower.

  5. Anonymous, whoever you are, what’s defensive about explaining your numbers? The explanation looks sensible to me. If I were Cofunds I would be more worried about Harry K and his sorry list of moans – seems like they are in a right old mess

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