Aegon's UK platform has suffered €2.8bn (£2.6bn) in net outflows so far this year as the troubles faced by advisers last year have started to take effect.
According to Aegon’s half year results for the period ending June 30, 2019, published today (August 15), net outflows in the UK hit £2.6bn suggesting that advisers were leaving the firm's platform following a raft of issues in 2018.
Clients began to face wide-ranging problems after a botched replatforming exercise which started on the May bank holiday weekend with issues lasting for several months.
The company previously said it will compensate clients and suffered an extra cost of £3m in June 2018 as a result of attempting to resolve the issues faced by clients.
Meanwhile, the firm’s platform assets in the UK have passed the £140bn mark for the first time, up 9 per cent from £128bn at the beginning of 2019.
This is due to Aegon’s Retirement Choices platform continuing to perform well despite a slowdown in defined benefit transfers, a trend seen across the market.
The assets combined with existing business resulted in Aegon UK reporting £173bn in total assets administered.
Adrian Grace, chief executive of Aegon UK, said the firm’s focus was on delivering platform enhancements which have been requested by advisers.
Mr Grace said: “In the second half of the year a number of significant changes will be made, including a recently implemented improvement to transaction history.
“Advisers can expect to see the pace of enhancements increase over the coming months as activity which has been in plan for some time starts to be delivered.
“Our overriding focus for both services is on supporting intermediaries with a commitment to dependable technology, to being easy to deal with and to helping advisers to build their business.”
In the UK, earnings before tax increased by 2 per cent to €70m (£64.6m) in the first half year of 2019 compared with €69m (£63.8m) in the first half of 2018.
But earnings from existing business dropped by 10 per cent to €53m (£49m), compared with the same period last year, caused by the net outflows, including upgrades to the digital platform, and lower investment income following bond sales.
Aegon acquired Cofunds for £140m in August 2016.
In its results, Aegon revealed that to date it has realised £40m in annual expense savings due to the integration of the Cofunds business but this figure is expected to rise to £60m later this year when legacy systems are disbanded.
Last month (July), it was reported that Zurich was contemplating the sale of its adviser platform and that Aegon was the rumoured buyer.
The Sunday Times reported that Zurich was in negotiations with Aegon about the sale of the platform and was looking for a target price of £50m.
Zurich and Aegon recently launched a joint venture, whereby a range of five multi-asset funds run by Zurich would be available to Aegon and Zurich clients, but not on other platforms.