With impeccable financial services credentials to his name, Mike Rogers, non-executive chairman of Aegon UK, is arguably in a good position to have a view on the future direction of the sector.
Mr Rogers ran LV for 10 years, and before that was a senior executive at Barclays, with his last job at the firm as managing director of UK retail banking. And with a non-executive portfolio following his executive years, he is clear about the changing dynamics from the impact of technology and shifting customer demands.
He said: “You can see the industry is facing very profound challenges, and if the companies don’t change they will be taken over and swept aside; I think they all get it and they all know what’s going on. The challenge is the bigger the existing business, the tougher it is to drive those kind of changes. It’s as much cultural as well as technological. The question is: do you have people in the organisation who get what the customers and advisers want and translate that through to the proposition?
“Consumers’ expectations of services has changed out of all recognition. They expect immediacy and easy-to-use [technology] and transparency around pricing, and simplicity. They are saying, ‘I’ve got a lot of information available to me and I’ve got access to those services, and I expect that from financial services’.”
At Aegon, he is seeing chief executive Adrian Grace attempt to transform the business after a tough few years. Since he arrived in 2009, Mr Grace has shed 3,000 people and disposed of a number of divisions, but with the acquisition of Cofunds, the plan is to integrate the firm with Aegon’s existing platform and make it focused on investments.
“What attracted me to Aegon was the journey that they’re going through, the transformation of the business over the past couple of years – I thought it was interesting,” Mr Rogers said.
“The focus is on supporting advisers, moving away from capital-intensive products to a technology service platform. That’s what Cofunds brought to the party.”
Cofunds has been something of an unloved child in recent years, in that despite being the largest and one of the oldest platforms, it was in desperate need of investment to bring it up to date. It took a while for previous owner Legal & General to sell the company.
Mr Rogers said: “As a strategy, where Aegon wants to go in the UK, Cofunds is a very good fit. It struggled with investment and not being central to the strategy of its parent for some time. What Adrian has done successfully, is he’s already built a very good technology platform, and he was starting to build a business along the lines of a digital business.
“People were a bit surprised when we bought something like Cofunds. Any integration of these kinds of platform businesses has its moments, but the team has got a good history of executing this, and this will be the biggest challenge. We’re on track to deliver that through 2018, and it’s important that we do.”