Aegon’s platform assets rose by £7 billion in 2016 as it prepares to invest heavily in the service's 'user experience' in a bid to ape-Amazon.
In the fourth quarter of 2016, the three months to 31 December, inflows to Aegon’s platform were £1.9 billion, from £1 billion in the last quarter of 2015. Over the year assets grew £7 billion to a total of £13.4 billion.
It reported earnings for the fourth quarter of £18.6 million, a reversal of the loss of £4.5 million over the fourth quarter of 2015.
Aegon purchased the Cofunds platform from Legal & General last year for £140 million, however, the assets of the acquired platform were not included in these results for Aegon's platform assets. As at June 2016 Cofunds had £77.5 billion assets under administration.
Chief executive of Aegon UK Adrian Grace (pictured) said the growth in assets on the platform could be put down to favourable markets and innovations in the software.
‘This platform growth has been driven by a combination of new business, buoyant stock markets and our upgrade programme, which is extending modern, digital pensions to our existing customer base,’ said Grace.
The protection business had increased sales of 11% in the last quarter of 2016 compared to the same period in 2015.
Grace said last year was a ‘game changer’ for the company, in part because it sold its £3 billion annuity book to L&G.
‘2016 was a game changing year for Aegon and by selling our annuity book and acquiring both Cofunds and BlackRock’s DC platform, the business has a very clear focus.'
Grace explained not being part of the competition for the distribution through advisers was a benefit to the company.
‘Against this backdrop our goal is to help advisers and other intermediaries meet this demand by offering the best tools and service and by not competing for distribution, we believe we’ll be successful,’ he said.
Looking at how Aegon will integrate its business with that of Cofunds, Grace said more details for the time frame will come after the next meeting of the Advisory Board in March.
He said an enhanced version of the Aegon platform is under development. while Cofunds users will see their own services upgraded, such as a reduction in paper and an integrated pension.
Grace said the platform industry faces a big challenge to invest in user experience after chasing its tail to keeping up with regulation changes since the retail distribution review (RDR).
‘In recent years the pace of regulatory change for platforms has been relentless.
‘[Platforms] had to contend with the RDR and pension freedoms in particular and as a result investment has focused to a large extent on remaining compliant and just keeping up with the changes.
‘Amazon is a prime example of a business that has been successful largely because it’s so intuitive and understands its customers. The next big challenge for our industry is to invest in the user experience while continuing to keep pace with regulation, which will no doubt continue to evolve,’ said Grace.