Aegon has been accused of “arrogance” and “shoehorning” after telling advisers they will be moving to its platform after buying Cofunds.
This morning Legal & General agreed to sell the Cofunds platform in a £140m deal, ending months of speculation.
As part of the deal, the Dutch company said advisers who use Cofunds will “upgrade to the enhanced version of Aegon’s platform”.
But the company was criticised for not consulting advisers and their clients about this move.
Carl Melvin, managing director of Renfrewshire-based Affluent Financial Planning, said: “I think that is pretty arrogant because they are saying we know best and this is not a consultative process.
“What about those advisers who don’t want their clients with Aegon? It tells me they don’t consider advisers to be a partner in this relationship; they consider us lackeys.”
Gordon Bowden, founder of Buckinghamshire-based Quainton Hills Financial Planning, said: “This is corporate speak for wanting to shoehorn clients into one platform to reduce costs.
“Whether we keep our clients there comes down to the cost and the service. We don’t like Cofunds and don’t put new clients there because we think the service levels are poor.”
Whether we keep our clients there comes down to the cost and the service. We don’t like Cofunds and don’t put new clients there because we think the service levels are poor.But Mark Till, the chief distribution officer at Aegon, said he wants to “build a relationship” with more advisers and said he is trying to make their lives easier.
Jonothan McColgan, a chartered financial planner with Bath-based Combined Financial Strategies, argued Aegon was after Cofunds’s assets under management, which total £77.5bn.
Meanwhile Aegon has £9bn of assets on its platform.
Mr McColgan said: “Aegon came to the platform market way too late so they were always going to struggle to get enough funds under management to make it viable.
“Cofunds has always struggled to make money so something had to give and this gives them both an opportunity.
“Aegon doesn’t have an enhanced platform, so it sounds like their platform is basically Cofunds.”
Like a number of other advisers FTAdviser spoke to this morning, Mr McColgan said he would wait to see how the purchase developed before deciding what to do with the clients he had on the platform.
Cofunds’s system was roundly criticised by advisers FTAdviser spoke to following the announcement of the deal, with Mr Melvin comparing it to a typewriter in a world of computers.
Simon Torry, chief executive of Essex-based SRC Wealth Management, said one of the reasons he is not a big supporters of Cofunds was because of the platform’s functionality and the “clunkiness” of the system.
“If it will improve functionality and the client gets a better experience and it can be done for the same cost, then I don’t really have a problem with moving to Aegon’s platform.”
Jane Hodges, chief operating officer of London-based Alexander House, said: “Cofunds has been in need of investment for some time now and it needed a parent willing to put some money in.”
Mark Polson, principal of platform consultancy The Lang Cat, pointed out 17,000 advisers woke up today (11 July) as Cofunds users, but once the transition takes place they will be Aegon users.
He said: “Not everyone’s going to be happy with that. Aegon has form in terms of making advisers grumpy when it comes to back books and client relationships.
“That kind of thing has to be put firmly in the past and Aegon is going to have to work hard to gain and keep the trust of many advisers who wouldn’t select it normally and in fact didn’t select it at all.
“But I don’t think there’s any need for immediate action, no-one knows what the post-takeover proposition will look like yet.”
Mr Till said the company had earmarked £80m to invest into Cofunds to improve it for advisers.
He said: “If they want to use this as a chance to trigger a consultation with their clients that is all good.
“We are trying to make their lives easier by giving advisers some of the things they have said they don’t have from Cofunds.
“What I am trying to do is build a relationship with a greater number of advisers and I believe that by doing so, and offering additional functionality, we can help their business grow and our business grow.
“We are not trying to grow assets for the sake of assets. We are trying to build a better proposition for advisers.”
