Aegon has confirmed it will be moving Cofunds’ assets over to its own technology provider, as it looks to set up an advisory board in a bid to smooth the transition.
Today Aegon ended months of speculation after announcing it had swooped in to purchase the platform giant in a £140m deal brokered by Fenchurch Advisory Partners.
Speaking to FTAdviser, Mark Till, chief distribution officer at Aegon, confirmed that all assets will be moved over to GBST, which powers the Aegon platform, Arc.
Cofunds has £77bn of assets under administration, versus Arc which has £9bn.
He emphasised the change will affect the technology, and will not be a migration of assets that will be a lot of work for advisers.
“The assets will move across, but the advisers will not have to get involved in doing suitability reviews and individual customer consultations. We will be able to handle it as a big technology migration.”
We have a high degree of confidence we know what we are about to embark on. Mark TillMr Till said the two platforms will run side-by-side for a period of time, adding it will “take time to do it properly” so that advisers have an easy journey.
But, with the merger expected to be completed by the end of 2017, he said cost savings will be made when the platforms are brought together into a single offering, mainly due to improvements in IT.
The chief distribution officer also said, when it comes to the upgrade, Aegon had no concerns about costs, adding it had all been planned.
“We have a high degree of confidence we know what we are about to embark on.”
The move means advisers who use Cofunds, which is currently powered by IFDS, will have access to investment trusts, exchange-traded funds, shares, an integrated pension, and will be able to use Aegon’s paperless system.
“There will be no pieces of paper that need to flow backwards and forwards, which I know is a core part of advisers’ frustration with Cofunds.”
Mr Till said Aegon does not expect to be owners of the business until the back end of this year, at which point it will publish a 12-month ‘road map’ giving details of how the single platform will be developed.
He also revealed the firm plans to set up an advisory board of around 10 advisers who will look to establish where the priorities lie and guide the development of the platform.
A person close to the deal said, depending on what they do with it, Aegon is getting a “reasonable” deal for Cofunds.
“Aegon is moving more into the platform space and L&G has gone into annuity and bulk purchase parts of the market, so effectively the two assets didn’t fit either company so they swapped them over,” the source said.
L&G had previously been in discussions with AJ Bell to buy the platform.
According to the source, there had been a handful of other suitors, including private equity firms and other existing platform players.
katherine.denham@ft.com
