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PosSol and Origen eradicate losses after cost savings boost

by Jun Merrett on Feb 15, 2013 at 07:38

PosSol and Origen eradicate losses after cost savings boost

National IFAs Origen and Positive Solutions have eradicated losses thanks to the impact of cost-saving measures, parent Aegon has reported.

The two groups have reported a combined nil profit for the last three months of 2012, compared to a £2 million loss over the same period in 2011. In the third quarter of last year they lost £1 million.

Aegon said the improvement in performance was due to cost savings, including streamlining the businesses and implementing changes in preparation for the retail distribution review. 

Aegon UK's overall performance jumped, with underlying earnings before tax hitting £20 million for the last three months of 2012, compared to a £22 million loss during the equivalent period in 2011. This was due largely to compensation payouts following pension administration failings coming to an end.

Earnings for its life business stood at £17 million for the fourth quarter of 2012, compared to £30 million over the same period in 2011, when 'one-time benefits' including the closure of its defined benefit scheme boosted figures.

Aegon UK’s new life sales increased 53% to £247 million, up on the £161 million in the fourth quarter of 2011, boosted by strong growth in group pensions and increased adviser flows onto the Aegon Retirement Choices platform, powered by Novia.  

The company said its pensions earnings were helped by the successful implementation of its cost reduction programme in the UK.

That programme helped reduce operating expenses from £98 million in the fourth quarter of 2011 to £69 million for the last three months of 2012. 

Aegon launched its cost saving programme in June 2010 in which it cut £80 million from its annual spend and just under 1,200 jobs across the UK.

26 comments so far. Why not have your say?

Dante

Feb 15, 2013 at 09:32

The art of press release;

The story is of parent Aegon, the title ,their problem chidren Pos Sol and Origen.

Next chapter; Adoption.

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Bob Donaldson

Feb 15, 2013 at 10:25

@Dante - I disagree the next chapter is divorce!

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Joe King

Feb 15, 2013 at 10:49

Origone.

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Graham Stevens

Feb 15, 2013 at 11:00

I don't agree. After a lot of bad press over the last year mostly created by chaps like you three above with own agend's it's nice to see some "Positive" news. Onwards and upwards.

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Feargal

Feb 15, 2013 at 11:08

Money Marketing posts a different story :-

Aegon distribution arms post £2m loss for 2012

Which one is teling the truth?

Do we ever know the truth?

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Matthew Burman

Feb 15, 2013 at 11:11

Shame they always bunch loss making Origone in with profitable PS they should quote seperate and then we will see the true picture, why do they use PS to offset and keep alive Origone ?

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Not positive Anymore

Feb 15, 2013 at 11:14

@Matthew

How do you know this to be the case? I know that Coleman says they are profitable, but has anyone seen the actual audited books to back this up?

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Feargal

Feb 15, 2013 at 11:41

It is spin, Money Marketing are looking at 2012 which is a loss, Citywire are referring to the last 3 months of 2012 only – Citywire are doing them a favour in any one else's eyes they continue to make losses.

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Figures guy via mobile

Feb 15, 2013 at 11:47

Feargal - both sets of figures reported here and money marketing are correct. This story has reported quarter 4 2012 compared to quarter 4 2011 - which is an absolutely valid comparison (quite clearly states that in this story) and the other publication chose to report full year comparisons - again valid (and again, quite clearly stated in the article).

So now you know the truth.

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Tracey

Feb 15, 2013 at 11:50

Aegon always lump these 2 together even though they are totally stand alone businesses with no common infrastructure, have totally different distribution models and operate in different markets.

I suspect the confusion helps sell the distributoin story to Aegon shareholders about the money squandered on the 2 acquisitions historically.

However, PS have apparently made a profit in excess of £1m after significant reductions in IFA numbers and HO staff so Origen must still be losing circa £3m a year even after their numerous restructures and downsizes.

Very interesting year ahead for both businesses, will PS continue their profitability now that the high charges on the mass leavers last year are no longer there, how much more will Origen be allowed to lose before Aegon pull the plug on them ?

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Dante

Feb 15, 2013 at 11:57

Graham- 90%of the comment last year was from ex Pos Sol people and of that 90% I suspect much was from those journeymen within Pos Sol who try to move RIs to a brave new world for their own gain.

.Onward and downward.

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Graeme Laws

Feb 15, 2013 at 13:03

It would be fun to try to add up just how much providers have lost by investing in distribution, and to know whether policyholders or shareholders have borne the cost.

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Tracey

Feb 15, 2013 at 13:10

Aegon's (shareholders) loss on PS is over £100m , and I undersand Aegon spent well over £50m acquiring the various elements that are now Origen (the old Momentum business was circa £25m alone) .That's capital purchase only, not sure what the running losses would be.

This money has been written off years ago and is up there with insurance companies and building socities buying estate agents as a great case study on how to destroy value.

Why anyone would ever deal with failed companies like Aegon these days is beyond me

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Ewart Matthias

Feb 15, 2013 at 13:36

The reality is more than likely to be a slight of hand with the accounting. For instance, they now charge a debt to all leavers of £10,000 irrespective of whether they have a debt or not and justify it as a levy against a potential FOS penalty against business the 'partner' may or may not have written, utilising a portion of the contract which is for indemnity business only. This creates debtors, which i turn is offset against debts and there you go - no loss - simplzz.

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Feargal

Feb 15, 2013 at 13:47

Ewart

I think you are right, thats what I have heard!

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Interested Observer

Feb 15, 2013 at 13:53

Blah blah blah from the usual PS knockers with their own agenda. Seriously, why not just include your recruitment details in your posts.

The story is about Aegon not Positive Solutions. But any opportunity to have a go...

I think a few of you will need to eat some humble pie when the official PS figures are released.

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Tracey

Feb 15, 2013 at 14:37

@ Interested Observer

Errrr, the story IS about losses at Aegons distribution arm, which is Origen and PS.

PS actually made a profit around £1m- £1.5m in 2012 which puts Origen on a £3m loss and there is some reasonable comment added above to consider about the futuer of both companies.

However, you PS outriders dismiss any negative comment as "disgruntled" or "disloyal" (copyright Call me Pete) when most of it is factually accurate.

You and your "Partners" would be better served in reading the posts before putting up the deflection shields

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Interested Observer

Feb 15, 2013 at 15:44

For 'accurate' read 'inaccurate'. It's usually unfounded rumour and speculation spread by people with hidden agendas. Unless I've missd something PS is yet to announce it's financial results so where does your 'accurate' figure of £1m - £1.5m come from?

Could it be that you're speculating?

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Tracey

Feb 15, 2013 at 16:16

Call me Pete was forecasting that to PS Partners at Regional Synergy Events.

Now, given he is

a) an accountant

b) the CEO

I reckon that's about as accurate as you can get until September 2013 when the 2012 figures are released.

You should be pleased for all at PS

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Aaron Hawkins

Feb 15, 2013 at 16:51

Ewart,

Your comments are totally incorrect.

The £10k cap is the maximum they will hold back when you leave, if you have potential clawback liability of £10k or more.

If you have less than this, then they will only take that amount.

I left in November for various reasons and I can confirm that they only kept circa £2k which covered my liability.

Aaron

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Feargal

Feb 15, 2013 at 17:21

Aaron

I do believe that you are right, if some one has a low potential liability the amount may be less than £10K but I would also add that the contract only ever required £6K so why has it been increased.

I also have been made aware that PS have been awkward with advisers who have been very loyal for many years but have just decided to move on and have now been classified as disloyal and treated quite badly.

Any way its their business, I have watched it over the years and I do think it has passed its sell by date.

Time will tell.

Have a good wekend.

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Aaron Hawkins

Feb 15, 2013 at 18:08

Hi Feargal,

I agree that the increase from £6k to £10k was handled very badly and upset a lot of people.

I can only comment on how I was treated and I have to say that overall they were very fair and we parted company on good terms.

The fact that I was not involved in Arch Cru and Keydata made my exit a lot more palatable than a number of my colleagues.

As for the future, I have no idea but I will be watching this space.

Have a good weekend too.

Aaron

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Ewart Matthias

Feb 15, 2013 at 18:45

@Interested Observer

Would you like custard with yours?

At least I state who I am. Yes Ex PS and yes I recruit for another company (and did for PS for 6.5 years) but never have I said or done anything that wasn't accurate or untrue but time alone will tell. I believed in what was the model PS was run by and successfully at that. I know that the facts I have stated are accurate and have £10,000 held against me, which is against the contract I signed and that many I speak with stay out of fear.

We will just have to see wont we?

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Ewart Matthias

Feb 15, 2013 at 18:50

@Aaron Hawkins

Would you like to see the letter sent to my current company stating I had a debt of £10,000, when no such debt was liable?

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Aaron Hawkins

Feb 15, 2013 at 20:56

Hi Ewart,

Not really but thanks for the offer.

There must be some form of explanation as the only time they would hold more than your liability back is for Arch Cru and Keydata potential liabilities and any ongoing complaints.

I'm sure if you brought it up with PSHO they'd give you an explanation, rather than bad mouthing them on here when it's not justified.

I had 3.5 good years at PS and you obviously had far longer. As a recruiter you must have sang their praises for a number of years.

The letter was possibly human error on their part, possibly an oversight on your part, I don't know.

I'm sure you can get to the bottom of it via Vicky F or Fran D

Have a good weekend.

Aaron

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Ewart Matthias

Feb 16, 2013 at 12:45

Thanks Aaron. You have a point and of course bad mouthing PS isn't what is needed, which in all honesty I wasn't intending, just pointing out the duplicity, however the treatment of many (not me, because I ignored the comment and which is what leavers should do too) hasn't been fair to say the least and to have seen PS pre and post Aegon involvement is what disappoints me and the damage that has been done to what was a great company and successful model is what makes me sad. If it hadn't been for the post Aegon management style I may well still be there.

I didn't have any involvement in Arch Cru & Keydata incidentally and that was because I could see the dangers, however PS didn't but now penalise the partners for their 'in effect' failings.

My early years at PS were very good, a breath of fresh air and a privilege. It is those memories I would like to hold on to and build on where I am now, which incidentally is built on the same model as was PS initially but with modification to prepare it for RDR and which I believe, will stand the test of time.

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