Ageon boss admits shortcomings
Grace apologises for customer service ‘issues’
Adrian Grace: ‘not what we planned’
Adrian Grace, chief executive of Aegon UK has apologised for service and operational issues relating to the transfer of funds to the business.
Some 400,000 advised Cofunds clients were re-platformed onto the new Aegon platform over the first May bank holiday weekend of this year.
Many of them and their advisers have since had a turbulent time as the company has struggled to get to grips with the subsequent re-platforming issues.
In a statement with half-year figures Mr Grace said three major projects have been delivered with the transfer of both Cofunds’ institutional and retail businesses to new technology and also the final element of the legal process to take on the policies of customers the firm acquired through buying BlackRock’s defined contribution platform right at the beginning of July.
“The combination of this activity provides us with a scalable platform business, centred on serving the needs of intermediaries,” said Mr Grace.
“It has not been without its challenges and the upgrade of the Cofunds retail book has resulted in service and operational issues for advisers and their customers, for which I am sorry.
“This is not what we planned to deliver and advisers and brokers have our commitment that we are fully focused on resolving the problems and providing the resource to ensure this is done as soon as possible.”
Mr Grace said the company had built on last year’s financial performance with earnings of £57m and both its older book of traditional policies and newer platform services are profitable.
The total assets under administration in the business includes £35bn on the traditional book and a growing platform portfolio of £120bn, where £3bn was added in the first six months of the year. Inclusive of £16bn Blackrock DC assets following acquisition in July, the total assets under administration in Aegon have reached £171bn (up from £145.5bn last year).
The workplace market
The company has “significantly broadened” its workplace proposition with the acquisition of BlackRock’s DC platform formally completing at the start of July.
This brings an additional range of propositions widely used by Trustees and larger employers. This large scheme specialist capability complements Aegon’s existing savings and wealth platform, which continues to serve both large and small employers in the contract based sector.
Mr Grace said: “Our focus now is to build on our position as the third largest provider of workplace pensions and to keep investing in the proposition.”
Protection sales continue to perform well this year and the company has made some significant enhancements to the proposition by digitising application processes and have plans to improve this further.
Supporting advisers on the PI challenge
Mr Grace said the advice market continues to benefit from strong consumer demand as individuals look for help investing in times of Brexit fuelled uncertainty and with planning around intergenerational issues like social care funding and inheritance planning or with weighing up the merits of DB transfers.
“With FCA reviews such as the Investment Platform Market Study and the Retirement Outcomes Review showing the advised market is supporting customers well, and concerns more focussed on protecting non-advised customers, there’s even more reason for politicians and regulators to support this market,” he said.
“A key challenge right now for many adviser firms is securing professional indemnity insurance at reasonable costs, particularly where firms are advising on DB transfers. This market does not appear to be working well and greater regulatory interventions may need to be considered if our industry is to further close the advice gap and provide the support millions of customers need.”