• Wider investment choice available including ETFs, Investment trusts and shares
• Less paper – more straight-through processing and removal of wet signatures
• Pensions fully integrated with the platform and additional decumulation functionality
• Current pricing will be maintained or improved
Cofunds will continue to be led by David Hobbs and be run from its HQ in Witham, Essex, with operational staff also located in Hove, East Sussex.
With its financial strength and commitment to the retail and workplace market, Aegon is making a considerable investment in platform technology through this deal. Intermediaries that use Cofunds will upgrade to the enhanced version of Aegon’s platform, and a roadmap for development and integration will be unveiled on completion of the deal in Q4.
Adrian Grace, Aegon UK Chief Executive said: “From a standing start a few short years ago, we have transformed our business beyond all recognition. Aegon is now well on the journey from a traditional life and pensions provider to the largest workplace and retail platform business. We are committed to growing our business alongside the intermediaries that we depend on and will use our enhanced scale to improve user experience, drive proposition enhancement and lower the cost over time.”
The enhanced platform will provide intermediaries – both Cofunds and Aegon users – with a range of propositional improvements. These will include:
• a broader investment range – including ETFs, Investment Trusts, all FTSE-350 stocks and other stocks upon request
• a focus on reducing paper and straight through processing
• an integrated pension
• current pricing will be maintained or improved
As ever, the issue of suitability and the decision on whether a client needs advice rests with the adviser. However, Aegon commits to ensuring that this technology upgrade will simply deliver additional functionality to advisers and clients without disturbing the underlying products or investments. This will avoid triggering the need for individual suitability reviews and so puts advisers in the strongest possible position.
Commenting on the acquisition David Hobbs, Cofunds’ Chief Executive said: "Cofunds was a pioneer in the platform market and has built a strong franchise with over 750,000 retail clients plus an enviable institutional business. We’re delighted with our new ownership and the combined proposition that we’ll be able to bring to intermediaries. The combination of Aegon’s retirement expertise and technology alongside our deep knowledge and experience of platforms positions us uniquely in the market. This is a strong endorsement of our team and our proposition, and is a clear signal that our business is here for the long-term.”
The deal includes taking ownership of the Legal & General branded Investor Portfolio Service platform powered by Cofunds. Aegon will continue to work closely with and support all of Cofunds’ institutional and bancassurance clients.
Through more efficient administration and investment, Aegon expects to generate annual cost savings of £60 million.
These will be spread across Aegon UK businesses and will be equivalent to 15% of the combined UK cost base. By the time the integration programme is finished, Aegon will have the UK’s strongest platform business in all the areas that matter – adviser support, administrative efficiency, assets and profitability.
Adrian Grace continues: "For users of the platform, today’s deal provides certainty regarding its future and we will keep what has made Cofunds a powerhouse and the primary platform for so many advisers, and improve what needs improving. Our success will depend on bringing advisers with us and delivering a smooth transition. We recognise the scale of the task at hand and the importance of getting the detail right. We will work closely with advisers throughout this process to make sure we do just that.”
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