Aegon has bought platform Cofunds from Legal & General (L&G) for £140 million.
The deal will make Aegon the largest advised platform provider in the UK.
In its half year results to 30 June 2016, L&G said Cofunds had £77.5 billion of assets under administration. This will be added to £9 billion in assets Aegon already has on its platform.
Aegon expects to make an annual saving of £60 million across it UK business following the deal.
Following the deal, Cofunds will be continue to be run by current chief executive David Hobbs. Other staff working at the platform will be transferred to Aegon.
Aegon has also bought L&G’s execution only platform Investor Portoflio Service. It will also continue to work with Cofund’sinstitutional clients such as Nationwide and SEI.
Advisers which use Cofunds will be moved to Aegon’s platform when the deal is completed at the end of the year. Aegon pledged that current pricing would ‘be maintained or improved’ following the deal.
Adrian Grace, chief executive of Aegon UK, said the success of the deal would depend on how many advisers made the transition.
‘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,’ he 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.’
New Model Adviser® first revealed that L&G was looking to sell Cofunds last June. It appointed Fenchurch Advisory to help completed the deal.
As New Model Adviser® reported L&G held talks with AJ Bell about selling the platform. However, the talks ended last September.
L&G chief financial officer Mark Gregory said technology issues played an important part in the decision to sell the platform.
‘Cofunds is at the point where it requires a significant upgrade in technology to exploit its leadership position in the UK platform market,’ he said.
‘We have concluded that this long term commitment is best achieved under Aegon’s ownership as a specialist wealth platform provider.’
Source: City Wire