Aegon UK’s chief executive has admitted the sale of guaranteed drawdown products has disappointed and he will be talking to advisers about their future.
Adrian Grace was speaking after Aegon announced earlier today (10 August) that its Irish arm, which provides the products, would be sold.
Following the departure of Axa and MetLife from the guaranteed drawdown market, Aegon is the only provider left offering these products.
Mr Grace said: “If you look at the market, Axa and MetLife have pulled out, the market is around £2.5bn and we are the last remaining provider of these products.
“Some advisers are very supportive of them and some dismiss them but interest has been less than we would have anticipated but pension freedoms and its impact has still to be fully felt.
“I would welcome comment from advisers. Do they see a need for these products going forward? If they don’t then we need to understand that as well. We will be talking to a lot of advisers over the next six months as well as doing our own market research.”
Mr Grace added that following pension freedoms he remained convinced there was a place in the market for a product combining drawdown with a guarantee.
Aegon has agreed to sell Aegon Ireland to AGER Bermuda Holding to “optimise” its portfolio of businesses.
The deal will go through at the end of the year and over the next six months Mr Grace said he would be talking to AGER Bermuda Holding to establish its interest in this market.
Mr Grace added that the integration of Cofunds was going as planned and that he hoped to have transferred the retail assets on the platform by the end of the first quarter of 2018.
He said: “We are working with our advisory board of advisers and we getting some very positive feedback.
“I don’t see any dark clouds on the horizon. The technology is already out there. We are not designing a brand new technology.
“The technology works today, we are adding a few whistles and bells to it but it is not a new platform.”
Earlier this year Aegon said it expects to be in a position to begin transferring Cofunds users to the upgraded platform towards the end of 2017.
It announced in March that the “foundation” of the platform which will replace Cofunds has already been built.
Aegon has said it wants to keep the best of both its platform and Cofunds, with its board of advisers saying they are keen to hold onto the pre-funding of trades and debit card acceptance which is available on the Cofunds platform as well as the wider investment range, integrated pension and reduced paper processes from Aegon.
damian.fantato@ft.com
