Private equity-backed consolidation within the advice market, makes Stephen Crosbie, head of Aegon’s adviser platform business, worry for the future of the sector.
Crosbie told FT Adviser one thing which stood out for him in the advice profession was the level of consolidation, some of which he believes was unhealthy.
“A massive thing right now is the amount of consolidation we are seeing in the market and some of it’s healthy, but some of it is unhealthy in my opinion.
“I get worried for the future of the adviser market when private equity firms buy firms, using debt to finance it.
“That is obviously a concern for the sustainability of those firms, because it obviously gives them what could become unsustainable levels of debt if that gets out of control.”
However he said other consolidation is “very healthy” and brings “synergies to the market”.
We all know there is a mass market of people who just are not getting the advice or guidance they need
Crosbie added: “Synergies probably mean better outcomes for customers and for quite a number of them, their intention is to grow and growth in the adviser marketplace is really healthy.
“We all know there is a mass market of people who just are not getting the advice or guidance they need when it comes to making financial decisions in their life. So I’m absolutely supportive of anything that makes advice more accessible for all.”
He told FT Adviser the Aegon adviser platform is “in turnaround” as it seeks to return to growth by 2028, following another year of outflows.
Earlier this year, the firm said part of this plan included targeting the top 500 financial adviser firms.
Crosbie thinks relationships are “vitally important” when it comes to picking a platform for advisers and said Aegon’s price cap can encourage advisers to bring all their clients assets to one place.
Under its retirement choices pricing, which includes Sipps, Isas and GIAs, there is a cap of 0.6 per cent up to £250,000, with 0 per cent over this price. It said this means the maximum annual charge is £1,215.
“The price cap is something we are really proud of, and we’re actually amazed that others haven’t followed this market,” he added.
“We think this provides more certainty for customers and encourages consolidation, driving better outcomes.”
Crosbie thinks there will continue to be a move towards the larger platforms in the market with the likelihood of some going out of business.
He said: “I do see some struggling, so I think you might see some struggle to be sustainable.
“There may be another few that have cash flow situations that might give them problems and could see opportunities for consolidation. What we are seeing in the market is gravitation to the bigger platforms.”
tara.o’connor@ft.com
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