Gains from pensions changes
Aegon benefiting from market shifts and asset deals
Pensions freedoms and uncertainties in the market have increased demand for advice, he said.
The company’s progress followed a shift in focus and the acquisition of assets, including big portfolios from Legal & General and BlackRock.
Mr Grace (pictured) said: “2016 was a game changing year for Aegon and by selling our annuity book and acquiring both Cofunds and BlackRock’s DC platform, the business has a very clear focus.
“A combination of factors including the pension freedoms, investment uncertainty and an increased demand for advice on transfers from defined benefit schemes is creating strong demand for financial advice.
“Against this backdrop our goal is to help advisers and other intermediaries meet this demand by offering the best tools and service and by not competing for distribution, we believe we’ll be successful.”
Earnings and platform growth
Aegon finished the year with strong earnings of £18.6m and its best quarter yet for platform growth with inflows of £1.9bn.
Over the course of 2016 assets on platform have grown by £7bn taking the total to £13.4bn.
Mr Grace said: “This platform growth has been driven by a combination of new business, buoyant stock markets and our upgrade programme, which is extending modern, digital pensions to our existing customer base.
“Protection is a core part of our proposition and continued to deliver excellent results, with sales up 11% compared to the same period last year.”
A roadmap for Aegon/Cofunds platform integration
He added: “There’s a lot of momentum behind the Cofunds deal which completed on 1 January. We’ve already had productive discussions with users of both Cofunds’ and Aegon’s platforms via our Advisory Board and recently launched an Adviser Panel to gather feedback from a wider group. It’s encouraging that our plans to combine the best of Aegon and Cofunds have been well received.
“At the next Advisory Board meeting in March we’ll outline a roadmap detailing further information on timings for our technology upgrade approach.
“This will focus on extending functionality to both sets of users through an enhanced version of the Aegon platform which is under development. Cofunds users will benefit from a reduction in paper and an integrated pension, for example, while Aegon users will benefit from features like pre-funding and debit card transactions.”
The challenge for the platform industry
Mr Grace continued: “In recent years the pace of regulatory change for platforms has been relentless. They’ve had to contend with the Retail Distribution Review and pension freedoms in particular and as a result investment has focused to a large extent on remaining compliant and just keeping up with the changes.
“This has meant underinvestment in user experience across the board and if we look outside our industry, we see the businesses that are successful are those that make life as easy as possible for their customers. Amazon is a prime example of a business that has been successful largely because it’s so intuitive and understands its customers.
“The next big challenge for our industry is to invest in the user experience while continuing to keep pace with regulation, which will no doubt continue to evolve.”
· Quarterly earnings of £18.6 million
· Platform assets hit £13.4 billion following net inflows of £1.9 billion
· Protection sales grow by 11%
· Clear momentum of platform strategy following completion of Cofunds deal