Alastair Conway, chief executive at James Hay and former sales and marketing director of Cofunds, has spoken out about rumours Legal and General are looking to sell Cofunds.
Mr Conway commented that the sale speculation was part of part of a general revaluation taking place across a lot of the large life companies with a platform presence.
“Like Axa, they are not sure if they’ve got the stomach to carry on being in this space,” he told FTAdviser. “Are advisers working with somebody who is genuinely going to be committed to the market?”
“The only way of being certain of that is if the organ of the platform, irrespective of its ownership, is able to make money, and if it can’t make money it’s either going to fail and therefore needs someone else to come in and get involved, or its going to need a parent to put money into it.
“So adviser need to question whether their is platform committed to this space and do they know who is going to be running it in the next five years as a minimum?’ Whoever they are working with, it moves us away from the silly debate that most platforms are competing on price.”
When Mr Conway’s comments about L&G’s ownership were put to Cofunds, a spokesman for the platform responded that their “commitment should not be in doubt”.
“We serve more advisers and end-investors than any other platform in the market, are profitable, have written £3bn in new business this year already from 5,500 advisory firms, and continue investing in our proposition so it meets the needs of our many clients.”
Rumours about whether L&G wants to continue to own Cofunds started to circulate earlier this year.
Last month FTAdviser’s sister publication Financial Adviser reported that Cofunds’ £37.9bn retail business is unlikely to leave its owner in the near future, despite market speculation that a sale was on the cards.
At that time, according to an insider, discussions over an immediate sale of Cofunds were off the table for the time being. When asked whether sale talks were no longer continuing, Richard King, press officer at L&G, said the company did not comment on speculation.
In August this year, it was reported that AJ Bell and platform FNZ had both separately held talks with the provider, with AJ Bell reported to be in an exclusivity period at the beginning of September.
L&G bought Cofunds two years ago in a deal that valued it at £171m.
According to its latest report and accounts for 2014, the platform has undergone business-wide cost-cutting, with a view to making £80m worth of savings this year.
When the insurance giant took over Cofunds there were several high profile departures from the platform.
In 2013 Chris Last, then chief executive, retired after just four months in the role and was replaced by David Hobbs, who remains in the post. Mr Last was appointed chief executive of Cofunds shortly after L&G’s acquisition of the company, announced in March and completed in May 2013.
Other high-profile departures around the time of the acquisition included former Cofunds chief executive Martin Davis and former Cofunds chairman Charlie Eppinger.
Former Cofunds director of marketing Verona Smith left the platform in May 2013, with former head of fund group relations Michelle Woodburn announcing her departure a couple of months later.
ruth.gillbe@ft.com
