Aegon’s UK arm has said it will not follow fellow Edinburgh-based life and pensions giant Standard Life by expanding directly into the advice sector, stating that it does not want to compete with advisers and that the ‘culture’ of intermediation is very different from that of a provider.
Speaking to FTAdviser, Adrian Grace said the adviser market is set to grow rapidly amid a major overhaul of pensions access options and Aegon was prepared to accommodate any business models and provide ‘tools’ intermediaries need to offer full freedoms to clients.
When asked in reference to Standard Life’s recent move into the advice market whether this could involve a direct move into distribution, Mr Grace said that Aegon knows its role in the relationship and has no intention to compete with advisers.
“We’re not here to compete with advisers. If others want to control that aspect then fine, but we don’t support that strategy.
“We owned Positive Solutions for eight years and we took a view that culturally advisers were best placed to own an adviser business, rather than a life and pensions company.
“Our focus is on providing the best digital solutions to advisers with one multi-channel platform for advisers, workplace and non-advised customers – to and through retirement.”
Aegon does still own adviser network Origen Financial Services, although Mr Grace stated that it is a standalone business with its own separate board and governance and it is not Aegon’s intention to turn the business into a direct field-based Aegon ‘sales force’.
“The culture of an intermediary businesses is very different to that of a life and pensions business and we have no desire to expand into this area.”
Standard Life managing director Barry O’Dwyer responded that he does not see his firm’s move, the first step in building a restricted national advice presence, as being competition for advisers, pointing out that the feedback has been “almost universally” understanding of the move.
“We recognise that there’s an advice gap that needs to be filled come April: advice was becoming the preserve of the wealthy. But now it’s about to be an essential service for a large proportion of the population - so someone has to help meet the demand and we have the capacity to invest.
“I don’t see any conflict at all - we’re still a partner for tools and technology,” he added.
Mr Grace said he believes advisers are entering a “boom time”, as the government’s ‘guidance guarantee’ service and the new at-retirement reforms set to come in from April will only cause more questions that require regulated advice.
Elsewhere, the group posted positive results this morning (19 February), with its three-pronged platform reaching £2.7bn in assets under administration, with inflows of £300m in the final three months of 2014.
It spent £5m on the platform in the fourth quarter, in addition to the £3m spent on the Retirement Choices side during the third quarter.
Mr Grace said that while things were now looking good, five years ago he was dealing with legacy problems, poor governance and business model issues.
“We’re finally starting to overcome these things, a lot of time and money was spent on cleaning legacy administration errors, while we also had to cut to cost base by going from around 4,900 staff in 2009 staff to 2,115 at the end of February as a result of digitisation.”
The results detailed plans for working with advisers using non-advised services with smaller pot clients, by making the Retiready non-advised digital platform available to those customers in need of a cost effective alternative to full advice.
“You can’t stop consumer trends, some people just don’t want full advice or prefer to use the internet, so rather than lose those clients, we’re suggesting advisers try to build relationships with these tools.”
peter.walker@ft.com
