Aegon UK’s chief executive Mike Holliday-Williams has labelled the retail business’ return to net outflows “a shame” and a loss of momentum, but said net inflows “will come back in time”.
The business recorded net outflows of £89mn from its retail business in the second quarter of this year, throwing the company back into the red after it briefly returned to net inflows for the first time since 2018.
With economic uncertainty continuing for some months to come, the UK boss said he does not expect the market to change by the next quarter.
As a result, the company will prioritise making good on its investments - particularly a string of digital improvements it has promised advisers.
“You’ve got to hold your nerve knowing you’re doing the right thing,” he told FTAdviser today (August 11) following the publication of the company’s quarterly results this morning.
Discussing how Aegon will manage outflows going into the third quarter, Holliday-Williams said: “We expect the market is not going to change. I think the core thing is we continue to manage the business efficiently, keep generating profits so we can invest back into the business."
Despite a drop in flows, Aegon UK posted an overall profit of £48mn, up 27 per cent compared with the second quarter of 2021 and also up on the £43mn operating profit the UK business posted last quarter.
“We've got a focus on where we're putting our money and our investments and we’ve already started that strategy,” said Holliday-Williams.
Aegon UK is currently building a new digital frontend for advisers. The chief executive said it is trying to get testing done this year, with a roll out to follow for advisers next year.
In the past, Holliday-Williams has said the new digital front-end to its platforms would be ready by the end of this year.
In the meantime, the company has made a number of recent improvements to its platform, including adding drip-free drawdown, a new self-invested personal pension, discretionary fund management capability, easing the transition of assets and digitising access to certain documents.
“Flows will come back in time and we’ll have a stronger platform, a stronger proposition to meet that need. That’s what we’re doing,” said Holliday-Williams.
“It's a bit of a shame. We just caught that momentum and then we've just lost it in the quarter.”
Aegon’s UK retail arm is a mixture of its two core platforms, Aegon Retirement Choices or ‘ARC’ and ‘Aegon Platform’ - the latter formerly known as the Cofunds platform - as well as a smaller chunk of Nationwide assets and some other customers.
Aegon acquired the Cofunds platform back in August 2016 but its later attempt to replatform the client base to its own platform's technology resulted in a wide range of issues.
