Aegon UK’s pre-tax profits rose by 17 per cent in the first half of the year as its platform business rebounded following troubles faced by advisers in the past couple of years.
According to Aegon’s half year results for the period ending June 30, 2020, published today (August 13), pre-tax profits in its UK business hit £71m, compared with £61m the same period last year.
The pensions provider said this was the result of consolidating its platforms on a “common set of technology” and a reduction in its cost base.
The platform business's pre-tax profits increased to £25m from £14m in 2019, driven by higher fee income as a result of continued growth in assets, as well as improved protection earnings.
Net inflows into the business hit £2bn in the first half of this year, whereas in 2019 the provider saw net outflows of £1.9bn as the issues faced by advisers in 2018 started to take effect.
Clients began to face wide-ranging problems after Aegon merged Cofunds with its in-house platform over the May Bank Holiday weekend in 2018.
The company previously said it would compensate clients and suffered an extra cost of £3m in June 2018 as a result of attempting to resolve issues faced by clients.
The provider also said lower expenses contributed to a growth in the platform business as savings made by the integration of Cofunds offset Covid-19-related expenses.
Aegon acquired Cofunds for £140m in August 2016.
Across the UK business, assets recovered following the stock market sell off in March and ended the half year at £174bn, which included £143bn of platform assets.
Gross deposits more than doubled during the period to £6.4bn while net deposit totalled £1.8bn, both driven by the increase in platform inflows.
Aegon UK chief executive Mike Holliday-Williams said he was pleased with how the company had operated throughout Covid-19 and that despite this it had continued to invest in the business throughout.
He said: “This has included proposition enhancements to the Aegon Platform and ARC as well as the launch of Member Insights, a tool which helps employers to analyse savings trends within their pension scheme.
“We’ll continue to invest in the second half of the year, with a number of additional proposition enhancements planned.”
He added: “Our performance gives us confidence that we are focused on the right markets.
“There are strong tailwinds behind advisers who are benefiting from client demand for retirement advice in particular and in the workplace market, where the government has shown its full commitment to auto-enrolment during furlough and where the value of contributions will continue to grow over time.
“Our future focus will be on the quality of execution against our plans to provide customers with exceptional experiences both in terms of the service we offer and also the outcomes we help deliver for them.”
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