Aegon's chief executive has claimed only the biggest platforms will make a profit in the future.
He made this remark as Aegon reported the integration of the Cofunds platform and a defined contribution business bought from Blackrock saw the provider’s assets to grow to £110bn in the third quarter of this year.
UK retail platform assets were up £1.4bn, with a further £1.1bn added by what it calls upgrades to the platform in the quarter.
Deposits from institutions hit £4.2bn in the three months to the end of September.
As a result, the UK branch of Aegon is to pay a £150m dividend to the parent company.
The UK business took an impairment charge of £31m on the disposal of its Irish business, and £13m in costs to integrate the Cofunds business.
Adrian Grace, chief executive of Aegon UK, said: ““Last year’s acquisitions of Cofunds and BlackRock’s defined contribution business along with the sale of our annuity book have transformed the scale and make-up of our business.
"Reflecting our strong momentum, we delivered earnings of £25m in the quarter, up significantly on the same time last year, and we are in the process of paying a dividend of £150m to Aegon Group which is representative of our strong financial position.
“The finances of the platform market can be defined by two characteristics, firstly a set level of fixed costs that every provider incurs in order to keep their systems up to date and to adapt to regulatory change, and secondly, tight margins."
"In a market where no provider can ignore these economic realities, it’s only those firms that are administering significant sums of money on behalf of advisers and their customers that will be able to generate a profit over the long-term.
"What is also clear is that platforms are replacing traditional life office solutions at the heart of financial adviser’s businesses due to the efficiencies they bring to administering client savings and the greater investment choice they provide.
"It is this combination of factors that led us to buy Cofunds last year and why we believe scale is so important in this market."
david.thorpe@ft.com
