Firing lineNov 13 2019

‘We want to help the development of the advisory market in the UK’

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‘We want to help the development of the advisory market in the UK’

And he does not shy away when talking about the eventful year he has had at Aegon.

When he joined the UK business in May 2018 as chief distribution officer, it was a pivotal time for the company. It was in the middle of integrating two businesses; BlackRock’s UK defined contribution platform book and the Cofunds platform.

The latter, which was bought for £140m in 2016, has given Aegon more column inches than its management would like.

Clients began facing wide-ranging problems after the replatforming exercise, which started on the May bank holiday weekend in 2018, with issues lasting for several months. 

According to Aegon’s half year results for the six months ending June 30 2019, net outflows in the UK hit £2.6bn, suggesting advisers were leaving the company’s platform following the issues.

Mr Taylor says the business underestimated just how interconnected the Cofunds platform was to advisers’ business.

He says: “You are dealing with 6,000 advisory firms, and they had a number of interfaces with Cofunds which had been well-established for 10 years and then we replaced that with the Aegon platform. 

“The advisers have their own processes and different ways of doing things. That is the thing we got wrong. We underestimated the scale of change we were putting advisers through.”

In August, the company said the platform returned to its target level of service in the second half of 2018. 

The second half of 2018 was about improving operational service levels and the quality of training staff, Mr Taylor says.

This year has been about adding capability to the platform and listening to advisers.

Rebuilding trust

Over the past 12-18 months, Mr Taylor and his team have also been working hard to rebuild trust.

Mr Taylor says: “Advisers have been incredibly patient with us. They have given us feedback about what they like or don’t like about the platform and increasingly, we are using their feedback to develop the platform moving forward.

“Relationships are still tested at times and we have a job to do to fully rebuild trust, but I think the progress we have made together with advisers over the past six months is really encouraging.” 

One of the new capabilities being added to the platform is transaction history, which advisers had on the old Cofunds platform, to help them with client reviews.

Others tools being added to the platform will enhance the building of model portfolios, client reporting and discretionary fund management.

Aegon is also working to reduce the number of manual interactions between advisers and the platform.

Mr Taylor says: “Currently, there is still some degree of manual work, but one of the reasons we bought Cofunds is to essentially produce a more automated platform that is more efficient for advisers and saves them time. 

“We are still working through automation of those processes. The intention is, as much as possible, to be able to do everything online.”

He expects that by next May advisers will have a more modern, automated and easier-to-use version of the platform. 

He believes advisers will be pleased with the end results, although he admits being frustrated that it will have taken two years to achieve.

“With hindsight, we probably would have taken a bit longer to iron out the problems we had,” he adds. “But we felt at the time that is was the right time to migrate the platform.

“The Cofunds technology needed to be replaced. I am pleased with the progress we have made since then, but clearly I would rather we got through it sooner.”

Mr Taylor says the biggest lesson Aegon has taken away from its migration problems is that it needs to listen to advisers more.

It has set up an online forum where around 600 advice companies that have signed up will give feedback.

There continues to be speculation that Aegon wants to buy other businesses.

Not wanting to be drawn, Mr Taylor says he is focused on completing the Cofunds migration.

Beyond bells and whistles

In any case, if and when Aegon considers future acquisitions, he adds that the market can have confidence that Aegon has learnt lessons from the Cofunds migration.

Aegon’s platform assets have passed £140bn, with Mr Taylor projecting that Aegon will be the first platform to reach £200bn.

With a lot of the large pieces of regulation being embedded, he adds that resources can be freed up to enable platforms to be more innovative and support advisers more.

He says: “We really want to help the development of the advisory market in the UK. [With all the uncertainty] advisers are in a unique position to understand clients’ hopes and dreams.

“A lot of what we are trying to do is work with advisers on those big macro themes. We are trying to look beyond the bells and whistles and the platform today and look at how we can help the next generation.”

Ima Jackson-Obot is deputy features editor at FTAdviser and Financial Adviser