AegonDec 6 2017

Firing Line: Mike Rogers

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Firing Line: Mike Rogers

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.

 

Surprise acquisition

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.” 

The idea is to get “genuine economies of scale”, derived from the amalgamation of the Aegon and Cofunds platforms.

One of the trends with life offices at present is the acquisition by many of them of adviser businesses, ostensibly to get closer to the client, and presumably to secure distribution. Is this a plan on Aegon’s radar?

Mr Rogers said: “I think it’s an understandable strategy; I don’t think it’s a foolish strategy. [These companies] want to get close to their customers and offer a fully integrated holistic experience. I think the challenge is that you have to look at the whole of the value chain, and advice and distribution is a separate piece of that. Is that your core business, is that what you’re going to be good at?

“At Aegon, we don’t think so; the adviser space does a good job of that. We want to focus on being the best in investments and platforms.” 

He believes that given its investment in the UK, Aegon’s head office has a “medium-term” commitment to the UK.

Prior to Aegon, Mr Rogers was chief executive of LV, before leaving in July last year when his successor, Richard Rowney, took over.

He said: “I have a lot of time for Richard. He’s a good guy, and I think the deal he’s done with Allianz [to create a joint venture in the general insurance division] solves a lot of strategic challenges for what they do. That business had grown so big, it needed that kind of strategic partnership. All the things they’re doing in digital, I’ll be cheering that on because that was something I was passionate about.”

One of his other non-executive roles is to sit on the board of RBS (he also sits on the board of Experian), which has made for some interesting meetings given the challenges the bank faces. He said of these challenges and the executive directors: “They get it, and if you look at the underlying force of business, it’s looking good.”

Ultimately, Mr Rogers has decades of experience at the head of successful businesses, insight from which will be brought to bear on Aegon UK. “The most important thing with any strategy – it doesn’t matter whether the strategy is absolutely the right one or absolutely the wrong one – it’s about how you execute that,” he added.

Melanie Tringham is features editor of Financial Adviser