CompaniesAug 12 2016

Cofunds deal and an angry Waspi: the week in news

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Cofunds deal and an angry Waspi: the week in news

As we slid into the summer ‘silly season’ it looked as if the news cycle was slowing down; then Aegon splashed the cash and those of us not on holiday had something to talk about again.

Of course, other things went down this week, so here is our Friday round-up of what you couldn’t afford to miss over the last five days:

1) Deal is done

After many months of speculation - we called it back in February - finally someone put their hand in their pocket to buy the UK’s biggest investment platform.

As the Lang Cat’s chief banter merchant Mark Polson noted, 17,000 Cofunds users woke up yesterday (11 August) with the prospect of moving to Aegon, after Legal & General agreed a £140m pricetag for the fund supermarket.

The sale came after L&G’s results earlier in the week showed Cofunds was hit by outflows of £700m during the first six months of the year, and many have warned of the technology upgrades required to keep the beast ticking over following three years of L&G ownership.

The analysis began, with several advisers grumbling about the inevitable integration troubles on the horizon, accusing Aegon of “arrogance” and “shoehorning” in its client move communications.

The Dutch-owned provider confirmed it will be moving Cofunds’ assets over to its own technology provider GBST and promised an advisory board to smooth the transition.

Aegon UK’s chief distribution officer Mark Till also promised no change in its strategy towards advice businesses, stating it was “very clear” the provider is an intermediated business first and foremost.

2) Waspi split turns nasty

Following last week’s revelations that the Women Against State Pension Inequality campaign had formed an “interim working group” to help recruit new staff following a split in the leadership, on Tuesday (9 August) some of the ousted founding members accused those who are left of organising a “meticulously planned military-style coup”.

The so-called “Waspi 3” only heard about the decision to form an interim working group when it had been announced publicly on Facebook.

“This wasn’t a hastily put together plan or a ‘knee jerk’ reaction by one person, but a military-style coup, meticulously planned and executed over many months ... and implemented without discussion or agreement,” they said in a statement.

The following day, the newly unshackled former pensions minister Baroness Ros Altmann revealed she fought behind the scenes for the Waspi cause when in government; a stance which “jeopardised” her position and was met with “total intransigence” within her department.

Speaking to FTAdviser, she predicted the government’s “absolute determination” not to grant the campaign any concessions would continue.

3) Property fund saga continues

While the initial panic appears to have died down somewhat, property fund managers are clearly still feeling the strain, with the last few days seeing a few more announcements from embattled groups looking to placate investors.

On Monday (8 August), Canada Life confirmed it has not restricted withdrawals from its life assurance bonds, even if investors have some of their investment in suspended UK property funds; an important message given the fact Standard Life stopped some of its customers from cashing in any investments from their life bonds, despite only a small proportion of the money being held in property.

The following day, Aviva Investors was forced to admit its £1.8bn Property Trust is likely to remain suspended for at least another five to seven months, following the initial 28-day period started on 5 July. In an update to investors, the fund house warned the suspension could last until March 2017.

By Thursday (11 August), it was F&C’s turn to update the market, moving its £270m UK Property fund from bid to mid pricing – reducing the impact of redeeming investors as positive inflows calm nerves at the firm.

Hugo Machin, co-head of the Schroders Global Cities Real Estate Securities fund, somewhat predictably suggested those hit by the UK property fund suspensions should go global, highlighting several strong areas of growth overseas.

Of course, for an unbiased and educational take on the subject, you’re best to read FTAdviser’s Guide to Property funds - and earn one hour of CPD.

4) Pension transfers still risky

Another week, another couple of Financial Ombudsman Service decisions regarding pension transfers; it is really no surprise so many advisers steer well clear.

One firm was told to compensate a client it told to transfer out of the dreaded Equitable Life and redirect future contributions from his pension plan to Scottish Widows and Scottish Life.

Another saw Kellands Northern Ireland required to pay up over a client who transferred her free standing additional voluntary contribution plan to a personal pension plan.

This issue shows no sign of being resolved anytime soon...

5) Silly season strikes

We usually try to avoid the celebrity tax scandal stories, but in the middle of August, needs must.

Actor Rupert Grint - famous for playing Ron Weasley in the Harry Potter films - lost his legal battle against HM Revenue & Customs for a £1m tax refund, after a tax tribunal judge threw out his appeal to shelter his earnings from the top tax rate.

peter.walker@ft.com