Aegon outflows hit £2.6m

Aegon outflows hit £2.6m

Adrian Grace

Aegon UK, which employs 2,2400 staff at its Edinburgh Park headquarters, including 286 in the Kames Capital-branded asset management arm, has posted half year results for the period ending June 30, 2019, revealing net outflows have hit £2.6bn suggesting advisers have been leaving the firm’s platform following the issues.

The results appear to suggest that advisers are leaving the firm’s platform following a raft of issues in 2018 when clients began to face wide-ranging problems after a botched replatforming exercise which started on the May bank holiday weekend with issues lasting for several months. 

The company previously said it will compensate clients and suffered an extra cost of £3m in June 2018 as a result of attempting to resolve the issues faced by clients.



Meanwhile, the firm’s platform assets in the UK have passed the £140bn mark for the first time, up 9 per cent from £128bn at the beginning of 2019.

This is due to Aegon’s Retirement Choices platform continuing to perform well despite a slowdown in defined benefit transfers, a trend seen across the market.

The assets combined with existing business resulted in Aegon UK reporting £173bn in total assets administered.

In the UK, earnings before tax increased by 2 per cent to €70m (£64.6m) in the first half year of 2019 compared with €69m (£63.8m) in the first half of 2018.

But earnings from existing business dropped by 10 per cent to €53m (£49m), compared with the same period last year, caused by the net outflows, including upgrades to the digital platform, and lower investment income following bond sales.

Adrian Grace, chief executive of Aegon UK, said: “In the first half of the year we passed another milestone with platform assets rising from £128bn at the start of the year and passing the £140bn level for the first time. In combination with our Existing Business, total assets administered on behalf of customers hit £173bn. In addition to strong asset growth we generated a profit of £61m and remitted £160m to Aegon group - our highest ever dividend paid. These figures reflect a consistent and profitable strategy by the business to develop a scale investment platform, while efficiently servicing and supporting our customers in older products.”

Mr Grace also pointed out that a number of “significant projects” were completed in the period, including the final migration associated with the former Cofunds book of business.

Aegon acquired Cofunds for £140m in August 2016.

In May around £8bn of assets and 300,000 Nationwide customers who manage their investments via Aegon’s Investor Portfolio Service, migrated to a new set of platform technology.

Mr Grace added: “We also commenced a new relationship with Atos with whom we have agreed a 15 year contract to service and administer our Existing Business (non-platform) customers. This will further improve service for around 1.4 million customers with a multitude of different policy types and builds on our existing relationship with Atos who currently service around 500,000 protection customers on our behalf.”

 

 

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