AEGON: RDR is an opportunity for the industry to ‘do the right thing’

AEGON reveals its plans for adviser and consultancy charging structures for RDR.

AEGON has today made clear it sees the changes brought about by the Retail Distribution Review (RDR) as an opportunity for the industry to 'do the right thing' for consumers while securing the future health of the industry, despite the execution challenges it brings.

AEGON UK Group Marketing Director Paul McMahon says:

‘Preparing for the RDR means a massive amount of change for all players. There’s inevitably a significant degree of angst when so much change has to be managed but we must never lose sight of the original reason for the RDR – the critical need to address fundamental weaknesses in our industry model and establish a sounder foundation to address the levels of distrust, disengagement and under-provision prevalent amongst UK consumers.

‘Many businesses – including AEGON - have had to make some big decisions about future plans and how to refine business models to ensure they’re in shape for the post-RDR environment. Within AEGON, the enormous amount of effort already undertaken, and our singular focus on being fully prepared for an evolving market place, ensures we’re particularly well placed to provide the support advisers and their clients will need in 2012 and beyond. It’s important to us that, in addition to being ready for RDR, we’ll also be ready to help advisers prepare for the changes ahead. Providing the support advisers and their clients need will be key for us in 2012.’

The statement comes as AEGON reveals the adviser and consultancy charging structures it will facilitate from outset as part of its RDR proposition. AEGON sees being ‘RDR ready’ as going far beyond simply complying with the regulations. The company says the key to RDR readiness is a level of responsiveness to the differing needs of clients. It will therefore offer solutions that can be accessed in a variety of ways including:

• a range of wrappers and services through the AEGON Retirement Choices platform
• an ‘RDR-ready’ range of products available on an adviser charging and consultancy charging basis including:
  • personal pension
  • group personal pension
  • drawdown and phased plans
  • guarantees range
  • offshore bonds

AEGON will continue to provide products on a commission basis where rules permit, for example AEGON will continue to offer protection on this basis.

AEGON believes a key area where the market requires clarity is the range of adviser and consultancy charging structures supported.

AEGON has worked closely with advisers to determine what structures will be needed to support future advice models. While different advisers will look for different structures, AEGON believes there is also an over-riding need to avoid unnecessary complexity.

Paul McMahon continues:

‘Our focus is on working with advisers to ensure we’re a preferred provider in the post-RDR world. This means going well beyond minimal compliance with the new regulations. A key part of our agenda is being able to offer access to solutions in a variety of ways to meet the demands of different business models.

‘Today, we’re reiterating the message we’ve been giving advisers when meeting with them, which is that our commitment to the UK market is stronger than ever. Our investment to ensure the range of propositional choices and charging structures is testament to that. We firmly believe AEGON will be a partner of choice for those advisory firms determined to be successful in the long-term UK savings market of the future.’

AEGON will support adviser and consultancy charges for pensions as follows. Further information on non-adviser charges will be announced later in the year.

Adviser and consultancy charge

Initial charge

• A monetary amount from the fund; or
• A percentage of the contribution

For regular contribution arrangements, either of the above can be spread over an initial period of the adviser and customer’s choice up to a maximum of 60 months.

Ongoing charge

To reflect the different nature of individual and corporate pensions there are some differences between how the adviser and the consultancy charges will be supported:

• Adviser charge:
  • A percentage of the fund value; or
  • A monetary amount; or
  • If it is for a member of a group scheme, a percentage of regular contributions
• Consultancy charge:
  • A percentage of the fund value; or
  • A monetary amount or a percentage of the regular contribution

AEGON will ensure the process for setting up and modifying these adviser and consultancy charges is simple and straightforward for advisers and their customers.

Ad-hoc charge

• A monetary amount

In addition to developing its proposition, AEGON continues to support and guide advisers through practicalities of business transition to an RDR world with its extensive range of guides, tools, templates and videos available on its well-established Business Brain website. There is also information and analysis on its RDR hub

For more information

Margaret Robertson
Tel: 0131 549 6798
Mob: 07740 897527
margaret.robertson@aegon.co.uk

Notes to editors

• AEGON’s approach is based on a rolling programme of research with a range of adviser firms started in May 2011. As well as exploring adviser charging requirements, the research covered wider adviser requirements, regulatory issues and any other RDR related concerns.
• AEGON continues to work with the FSA and the rest of the industry to resolve any existing and emerging issues.
• AEGON is committed to communicating its proposition to advisers as it develops. Further details of proposition and product charges will be released in 2012.
• In the UK, AEGON offers pensions, life insurance, asset management and financial advice to around two million customers. AEGON UK has assets under administration of £54.6 billion and employs approximately 3,000 staff.
• As an international life insurance, pension and investment company based in The Hague, AEGON has approximately 26,000 employees world wide and 40 million customers in the Americas, Europe and Asia. AEGON's revenue generating investments totalled EUR 404 billion at 30 September 2011.