The Aegon IGC report is a cracker. You can download it from this link. A handy tip is to view this as a download – it’s a bit awkward in your browser.
Aegon’s IGC has done the smart thing and stuck to the FCA’s VFM Framework. This makes for a simpler viewing experience and by sticking to the key metrics of performance , charges and members support is easy.
In addition there is a clear VFM assessment for investment pathways (which excludes an assessment of member support)
This is the first VFM Assessment I have read that gives me a clear idea of what the IGC is thinking in creating the RAG ratings. Although I am in no position to verify the IGC’s findings, they are consistent with the ratings and helpful in allowing me to think about Aegon’s offering. I help some Aegon clients in their understanding of their workplace pensions and AgeWage provides detailed analytics on the outcomes their staff are receiving relative to market benchmarks. My experience working with Aegon suggests that it takes VFM measurement seriously and it is good to see this reflected in the IGC report. The VFM assessment gets a green from me.
Effectiveness
The old saying “what’s measured, gets managed” holds true. Ian Pittaway introduced a number of measures to assess the direction of travel for member outcomes. Aegon monitor across all products the weighted average charge paid by members.
This work is really helpful to employers who can see where their arrangement sits relative to others.
The report gives a number of other charts which help employers understand the underwriting of their charge , giving them scope to discuss charges in a reasonable way.
There is no hyperbole from the IGC, the delivery of information is helpful rather than partisan
But it is fair to say that the IGC has not got as far as others in reducing costs and charges for legacy schemes
This IGC is more of an enabler than a fighter (in the way Standard Life’s IGC fights). Nonetheless, it goes about its business in a way that makes me think it effective. I give it a green for the work it is doing in giving insights into the Aegon way of doing things.
The IGC also picked up on concerns about the BlackRock Flexi Lifepath fund. Here is some sample data on work we have done on outcomes for one section of the TargetPlan (the one that was set up by BlackRock and bought by Aegon)
While always outperforming the benchmark (scores greater than 50 show positive value for member’s money) , the value from Flexi LifePath dipped over the past five years and has only recovered recently. Savers with relatively short saving experience have not been getting VFM, those with longer histories have.
The IGC has got BlackRock who manage the Flexi LifePath fund and BlackRock has agreed to a realignment of the fund to meet changing economic conditions. It is an example of an IGC working with funder and provider to improve matters and again I applaud Aegon and its IGC for getting things done.
Savers in LifePath Flexi will be pleased to see the fund has had an outstanding year
Readability
This is a well constructed report that reads very easily. Although I could find fault with elements of it (the sections on engagement drag), information is presented clearly, concisely and professionally
I would go so far as to say this is the best report I have read this year and it gets a third green for being an enjoyable, interesting and relatively concise read.
Conclusion
Aegon shows itself a highly committed provider of GPPs. It has not reduced its charges as much as others and doubts persist about its service levels but it is clearly in touch with its IGC which is doing a good job for it.
