The company said this morning it is creating the UK’s largest platform business after announcing it had bought the platform from Legal and General.
The move comes after Aegon’s recent acquisition of BlackRock’s UK DC platform. Aegon said it expects to make annual cost savings of £60 million across its UK businesses - equivalent to 15% of the combined UK cost base.
Advisers that use Cofunds will upgrade to the enhanced version of Aegon’s platform, and a plan for development and integration will be unveiled on completion of the deal in Q4, officials said.
Aegon said the takeover signals its long term commitment to retail and workplace advisers.
Adrian Grace, Aegon UK chief executive, said: “Our success will depend on bringing advisers with us and delivering a smooth transition.
“We recognise the scale of the task at hand and the importance of getting the detail right. We will work closely with advisers throughout this process to make sure we do just that.”
He said: “As ever, the issue of suitability and the decision on whether a client needs advice rests with the adviser.
“However, Aegon commits to ensuring that this technology upgrade will simply deliver additional functionality to advisers and clients without disturbing the underlying products or investments. This will avoid triggering the need for individual suitability reviews and so puts advisers in the strongest possible position.
"For users of the platform, today’s deal provides certainty regarding its future and we will keep what has made Cofunds a powerhouse and the primary platform for so many advisers, and improve what needs improving."
Cofunds will continue to be led by David Hobbs and be run from its HQ in Witham, Essex, with operational staff also located in Hove, East Sussex.
David Hobbs, Cofunds’ chief executive, said: "Cofunds was a pioneer in the platform market and has built a strong franchise with over 750,000 retail clients plus an enviable institutional business. We’re delighted with our new ownership and the combined proposition that we’ll be able to bring to intermediaries.
“The combination of Aegon’s retirement expertise and technology alongside our deep knowledge and experience of platforms positions us uniquely in the market. This is a strong endorsement of our team and our proposition, and is a clear signal that our business is here for the long-term.”
Mark Gregory, group chief financial officer of Legal & General, said: “Cofunds is at the point where it requires a significant upgrade in technology to exploit its leadership position in the UK platform market. We have concluded that this long term commitment is best achieved under Aegon’s ownership as a specialist wealth platform provider.”
The deal includes taking ownership of the Legal & General branded Investor Portfolio Service platform powered by Cofunds. Aegon will continue to work closely with and support all of Cofunds’ institutional and bancassurance clients.
Legal & General and Aegon have worked together this year on three “mutually beneficial” transactions:
• the acquisition of Aegon’s £2.9bn back book annuity portfolio
• the 5 year distribution agreement to provide individual annuities to Aegon pension customers
• the acquisition of Cofunds and IPS by Aegon.