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Aegon’s UK retail arm returns to positive net flows

Aegon’s UK retail arm returns to positive net flows

Aegon has returned its UK retail business to positive net flows, recording £23mn of net retail deposits in the first quarter of this year.

The advised investment platforms had suffered £38mn of outflows the previous quarter, but Aegon has been slowly shrinking its level of outflows over the past two years.

This is the first time the retail business has posted positive net flows since the second quarter of 2018. It consists of two core platforms, Aegon Retirement Choices or ARC and Aegon Platform - the latter formerly known as the Cofunds platform.

Operating profit was up 24 per cent on the same time last year, to £43mn. This company said this was driven by increased fees from higher equity markets compared with the first quarter of last year, expense savings, and positive net deposits on the platform.

Aegon UK's chief executive, Mike Holliday-Williams, told FTAdviser he was pleased with the result considering the macroeconomic backdrop which has impacted many advised platforms negatively.

“IFAs make up a big part of our net flows,” said Holliday-Williams. “Our improvements [to the platform] are gaining momentum. We’re also seeing [asset] increases from people moving big assets. We’re in a market of consolidation, which sometimes benefits us, and sometimes doesn’t.”

Aegon serves around 6,000 advisers overall. The UK CEO said its sales and distribution arm was playing a key part in leading the platform to win more assets via transitions through M&A, alongside its platform improvements.

These improvements have included adding drip-free drawdown, a new self-invested personal pension, discretionary fund management capability, easing the transition of assets and digitising access to certain documents.

They follow a series of issues Aegon experienced after it acquired the Cofunds platform back in August 2016. The platform’s most recent issue was recorded in August 2021, when it suffered direct debit issues.

The platform has since said while a number of firms left the platform as a result of these issues, the more common response of advisers was to reduce the extent to which they used the Aegon platform over other providers.

Holliday-Williams said feedback from advisers generally hinges around the phrase "can you just make it easy?".

Aegon is currently focusing on trying to improve reporting, client reviews, and its back-office integrations. “We have a backlog of big things we’re working through,” said Holliday-Williams.

The platform is in the “build and test phase” of its new platform face. In February, Holliday-Williams said the revamp would be ready by the end of this year.

Asked how the platform was getting on, the CEO suggested there is a chance it may not be ready by then. 

“We’re in the build and test phase for the new platform face. We’ll see where we get to and whether we’ll be ready for that [end-of-year launch]. But there are lots of other changes on the way, and we want to get the launch right.”