Does insurance giant Aegon know what it has got into with its £140 million purchase of Cofunds from Legal & General?
The company’s former chief executive has issued a warning to the insurer about transferring platform assets on to a new technology provider – outlining that it is fraught with difficulty. He also believes that Aegon is likely to discover some functionality and data “gaps”.
Speaking to FTAdviser, Clive Bootham, who led Cofunds from 2002-2003, described Aegon’s acquisition as a “good move” but outlined that there could be problems related to data telling the publication that it might be necessary to do a big data “clean-up”. This would include ensuring that clients don’t have two accounts and that advisers’ names are spelt correctly. He said that while this could be seen as just good housekeeping it was vital not to “migrate issues from one system on to another” and he believes it will not be a simple job.
In addition, Bootham pointed to functionality issues associated with mergers and stated that there will be “gaps between different technology providers”.
Bootham also speculated about why Legal & General would choose to sell the platform after just three years. According to the publication, his guess was that it may be down to the costs associated with re-platforming Cofunds.
Furthermore, he outlined how perceptions of platforms have changed over the years – pointing out that in the past people were worried about whether the owners of a platform could influence what was available – but “now those conversations don’t happen”. He instead believes that people are focused on functionality and the ability to support a business.
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