Aegon boss: financial advice should be like Amazon

Aegon UK CEO Adrian Grace

The CEO of Edinburgh-based investment and insurance firm Aegon UK said financial adviser platforms need to become more like Amazon and “invest in the user experience.”

Aegon UK, formerly Scottish Equitable, recently completed the roughly £140 million purchase of Cofunds — an investment platform for financial advisers — and employs more than 2,000 in the UK.

As Aegon UK and its Dutch parent announced results on Friday, Aegon UK CEO Adrian Grace said: “In recent years the pace of regulatory change for platforms has been relentless.

“They’ve had to contend with the retail distribution review 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.

“This has meant underinvestment in user experience across the board and if we look outside our industry, we see the businesses that are successful are those that make life as easy as possible for their customers.

“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.”

The Hague-based Aegon on Friday announced underlying pretax profit of about 554 million euros for the fourth quarter, up 27% on the same period a year earlier.

Grace said 2016 was a game changing year for Aegon UK as it sold its annuity book and acquired both Cofunds and BlackRock’s defined contribution platform.

“A combination of factors including the pension freedoms, investment uncertainty and an increased demand for advice on transfers from defined benefit schemes is creating strong demand for financial advice,” said Grace.

“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.”

Grace said Aegon UK finished the year with strong earnings of £18.6 million and had its best quarter yet for platform growth, with inflows of £1.9 billion.

“Over the course of 2016 assets on platform have grown by £7 billion taking us to £13.4 billion,” said Grace.

“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.

“Protection is a core part of our proposition and continued to deliver excellent results, with sales up 11% compared to the same period last year.”