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Platform Focus: Aegon – fee cap is a major step in simplifying the process

Findlater-Freddie-The Platforum-2013
Freddie Findlater

Aegon launched its Aegon Retirement Choices platform in November 2011 to a limited number of advisers. The launch of the platform was interesting as Aegon decided to partner with an existing player, Novia, to help bring them to market. The underlying technology for the platform is supplied by GBST while Novia looked after administration. Aegon would eventually acquire Novia Investment Services, the company set up specifically to support Aegon, in December 2013.

Since launch, Aegon has rapidly added to the platform. Aegon’s year-on-year growth to March 2014 has been remarkable at over 800 per cent, albeit off a smaller base. Net sales figures remain strong, at about 90 per cent of gross sales.

With growth comes adviser expectations. While comments from primary users (holding most of their clients’ assets with the platform) are positive, those users who use Aegon as one of many platforms can be more critical. Some users complain about the usability of the system for example.

Aegon caused perhaps the biggest rumble following the Budget with changes to its fee structure. Capping the total platform fee at £1,215 is big news for larger client accounts although they remain expensive for smaller accounts. Competitors dismiss this as “attention seeking” as it only applies to a small percentage of customers. But this capping is an important step in the ongoing simplification of platform pricing structures. Aegon has also announced it will offer a fixed fee from 2015.

From a proposition point of view, the Budget would seem to have favoured this pre- and post-retirement platform but the top pricing tier of 60 basis points is a hurdle in its broader adoption. The new cap has gone some way to addressing this and creates some immediate due diligence questions for advisers with larger customer accounts. We have run some scenarios for £750,000 accounts. At this level there are lots of platforms charging about 30bps – which is about £1,000 more than Aegon. This presents due diligence questions for advisers using uncapped platforms for larger accounts.

Freddie Findlater is head of adviser platforms at The Platforum


Aurora financial planning chartered financial planner Aj Somal says: “In terms of pricing the platform is fairly mid-range, like many other life-co backed platforms. The real independent platforms will always carry more favour with independent advisers. For the likes of Aegon, as the annuity side of the business falls after the Budget, it will hope to replace it with business on platform.”

Kingdom Investments Management managing director Steve Hunter says: “Initially it was not a great experience but Aegon has worked hard at improving the service in the last five to six months. Communications are now much stronger and clearer. The charging structure is very fair and I like the fact it allows clients to login and look through at the investments. One thing I would like to see is all the funds being made available in other wrappers, not just a pension wrapper.”

The Platforum Wrap Facts

Date of launch: 14 Nov 2011

Ownership: Aegon N.V.

Current AUA:  £1,562,410,000 Mar 14

Number of IFA users/End users: 7920/ 27886

Number of funds/ fund managers: 4690/135

Products and assets

Funds • SICAVs • Hedge funds • ETFs • Institutional funds • Cash account • Interest rate on cash (0.4%) • Passive funds • Equities • Structured products • Gross Nominee Account

Tax wrappers

General Investment Account • Cash ISA • Stocks & Shares ISA • S&S ISA: Interest on cash • Personal pension • SIPP • Capped, flexible or annual drawdown facility • Offshore Bonds • Access to 3rd party DFM

Tools and links

Build and maintain own models • Risk profiling tool • Asset allocation tool • Provide any other functionality tools • What if’ scenario tool • Tax planning tools • Rebalancing tool • Model portfolio or templating tools • Client illustration tool • KFD tool • Charting and graphing tools • Additional reporting tools • Links to back office software • Valuation tool for non-platform business

Online support provided Most servicing functionality is available online allowing you to self serve. There is online help and FAQs, which should answer the majority of questions that may arise whilst going through any of the ARC functions.


MM_100714_Graph Platform

The Platforum’s take on price

With pricing tiers starting at 60bps, Aegon can be relatively expensive for smaller clients. The newly-introduced fee cap kicks in when portfolios hit £250k, making Aegon increasingly competitive for larger portfolios.




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