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Aegon calls for FCA to offer pension transfer clarity

Aegon calls for FCA to offer pension transfer clarity

Aegon’s platform business breezed past the £100bn milestone after its takeover of Cofunds last year and chief executive Adrian Grace predicts business will soar even more if the regulator clarifies pension transfer rules.

According to the company’s results for the first quarter of this year, published today (11 May) Aegon’s Arc platform saw assets hit £15.2bn, while Cofunds assets reached £86.8bn over the period.

This takes total assets to £102bn, which is a dramatic increase from the £7.6bn platform assets Aegon held in the first quarter of 2016.

In August last year, Aegon reached a deal to buy the platform giant for £140m.

Adrian Grace, chief executive of Aegon UK, said: “We believe scale will be vital in the platform market, and a record quarter of new sales on the Aegon platform and the strong performance of Cofunds in the first quarter put us in an excellent position.”

New business inflows on the Arc platform reached a record £1.2bn during the three months, which Mr Grace said was a reflection of broader trends. 

Consumer confidence, he said, had proved resilient despite the uncertain political outlook, while pension freedoms has increased the need for financial advice, and increased enquiries about pension transfers.

“With advisers naturally cautious, there’s a growing consensus that the FCA could benefit the market by offering regulatory clarity on what it expects from transfer advice, so that advisers can respond to customer requests for advice with confidence.”

Last month FTAdviser revealed there are currently 54 advice firms voluntarily restricted from carrying out pension transfers.

The Financial Conduct Authority also confirmed last month that it will publish a consultation paper on defined benefit to defined contribution pension transfers.

The confirmation came in the FCA's latest guidance consultation on the Financial Advice Market Review.

The relevant statement read simply: "We are expecting to publish a consultation paper on advising on safeguarded benefits in due course."

The City watchdog gave no timetable on when to expect the paper to appear.

Earlier this year, Aegon revealed that it would be upgrading the technology on its platform. 

Mr Grace said the company is committed to investing in the platform to create tools and services to help advisers grow their business and better serve their customers by manageing their risk and costs effectively.

Earnings for the whole Aegon UK business were up 45 per cent on the same period last year, reaching £31m. 

“This profit figure represents strong new business flows, a focus on customer retention and effective cost management all aided by a buoyant stock market.”

Aegon also completed its acquisition of BlackRock’s defined contribution business in the second half of last year, and said it was already seeing the benefits of the deal by boosting its workplace pension offer, particularly for larger employers.