View more on these topics

Aegon fails to reduce charges after passive switch


Aegon is continuing to charge clients the same level of fees despite switching them from an active to a passive fund.

In a letter sent to an adviser and seen by Money Marketing, Aegon says following a review from 25 October its North American fund is switching from being actively managed by Kames Capital to passively managed by BlackRock.

The provider says the risk rating and yearly charges for the fund will not change as part of the switch, but does not spell out the cost of the new fund.

An Aegon spokesman says the total charge of the new fund is 1 per cent “as a standard product charge”.

He says: “The North American fund had no additional fund charges or expenses attached to it, so for our older packaged pension products there’s no change in the fund charge. The total charge for this fund is 1 per cent which includes product charges.”

When asked, the spokesman declined to comment on why the change from active to passive has not been accompanied by a reduction in the annual management charge.

Aegon has also not provided details on the number of clients affected.


Ian McKenna: Aegon’s bold strategy after Cofunds deal

Aegon’s acquisition of Cofunds potentially puts the company in a very strong position not only to build deeper relationships with established adviser firms, but also to support the emergence of the next generation of advice businesses. Aegon chief executive Adrian Grace says he positioned the deal as potentially the last piece of the jigsaw in […]


Aegon to power Nationwide investment advice after Cofunds deal

Aegon has signed a deal to continue managing Nationwide’s online investment service following its acquisition of Cofunds. Aegon confirmed its £140m acquisition of Cofunds last week after a verbal agreement in February. Through the acquisition Aegon also inherited Investor Portfolio Service, a system where investments are managed online. Nationwide has £8bn of assets managed through the service […]


Advisers urge Aegon for heavy Cofunds investment

Advisers have registered a mixed response to Aegon’s acquisition of Cofunds with hopes the insurer will invest more in the platform than previous owner Legal & General, alongside price-hike concerns. Aegon confirmed its purchase of Cofunds for £140m in its results announcement this morning. The deal means Aegon will be the biggest platform provider in […]

The death of retirement – a boost for protection?

According to our recent report on the death of retirement, changes in workplace pension provision mean that coming generations of retirees could have a radically different experience of retirement from their parents. The average contribution rate into an old-style final salary pension was around 20% of total wages, the statutory minimum for a new automatic […]


News and expert analysis straight to your inbox

Sign up


There are 8 comments at the moment, we would love to hear your opinion too.

  1. doesn’t feel uncommon. my wife has a new workplace pension with Royal London and on their governed portfolio funds you have a choice between active and passive, both at 1% charge…

    • To be fair to Royal London’s Governed Portfolio funds Chris, at least your wife will be getting rebalancing on a monthly basis and the governance of the funds so they are actually doing something for their money. In my opinion Aegon are just trying to find another way to make more profit by doing less. You can bet your bottom dollar that they will have screwed Black Rock into the ground on their fee too.

    • No they don’t, the active fund (Rathbones Global Alpha) has an increased charge. The fund management figures are net of 1% for passive, but with discounts generally cheaper than 1%. The cost of the active is dependent on equity %. High equity %, higher proportion of fund on higher AMC.

  2. I have had this letter also and my immediate reaction was that this change of strategy must be accompanied by a reduction in the charges. As this is not the case then I would guess many of us will be looking closely on review at switching funds and/or provider.

  3. That's because.... 22nd September 2016 at 4:08 pm

    I’m assuming that this is 1% in total for the “product” (eg pension plan) PLUS the underlying investment (ie the pension fund – in this case the N.American fund).

    And that this 1.0% represent the minimum contractual cost for both plan + fund, and as specified in the product T’s & C’s ?

    [As is the case with a number of clients presently with relatively small sums in old-style Aegon FPP’s]

    If so, then why is anyone surprised. If the T’s & C’s specify a minimum 1.0% charge, then that’s what will be applied.

    • That’s what I thought too. Breakeven point for stakeholder at 1% was 8-12 and round about the point breakeven was being met, auto enrolment began, QED many plans have been made paid up before break even has been met.
      Much as I am not very impressed with AEGON’s admin anymore anything at 1% or below which covers platform and fund, is not unreasonable especially where quite often the plan sizes are below £50k.

      • Any AEGON plan arranged after stakeholder began which is NOT stakeholder friendly should have no penalties so can be easily transferred to a new plan with another provider should the individual wish it, or to AEGONs WRAP (ARC), although I don’t like ARC.

  4. Chris – Royal London have a standard charge but there will be a discount as well depending on what the agreed AMC on the scheme. It will be less than 1%

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm