Aegon slims down after offloading advisory firm

LIFE and pensions group Aegon has sold one of its financial adviser companies and taken a stake in its new owner.

Picture: Ian Rutherford

The Edinburgh-based group is offloading Newcastle-based Positive Solutions (PosSol) to independent financial adviser (IFA) network Intrinsic Financial Solutions for an undisclosed sum. Aegon will own part of the Swindon-based company, but declined to dislose the size of the stake.

Aegon said the group will keep its branding and retain its senior management team, including chief executive Peter Coleman. It said it had no plans to sell its other advisory business Origen.

PosSol has nine UK offices including Edinburgh and Glasgow, while Intrinsic has four, with a network of around 2,150 advisers. Together the group will have more than 3,000 advisers.

Aegon bought a 60 per cent stake in PosSol in 2002 from then chief executive David ­Harrison and bought out the remaining 40 per cent in 2005 in a deal that valued the company at £163 million.

Aegon’s distribution arm, which includes a 20 per cent stake in Tenet, has been lossmaking for a number of years. The group’s distribution business trimmed losses to £2m in 2012, from £6m in 2011, and broke even in the final three months of the year, Aegon said.

In its 2012 accounts, PosSol saw turnover fall to £70.7m from £80.6m but reported a pre-tax profit of £2.3m, reversing a £360,000 loss in the prior year.

Coleman said the IFA management team has “worked immensely hard to resurrect the fortunes” of the business which has seen a “remarkable financial turnaround”.

In January, Aegon announced that Patrick Gale, executive chairman of distribution, had stepped down “to pursue other interests”.

Adrian Grace, chief executive of Aegon UK said: “Positive Solutions is a good business. Until now we have seen it as core to our strategy. However in a post-RDR world we intend to focus on our market-leading platform, which is gaining traction at a remarkable rate, and on advancing digital solutions to better meet the savings and retirement needs of our customers in the workplace and those individuals approaching retirement.”

Richard Freeman, chief executive of Intrinsic, said: “Positive Solutions is a well-run business that delivered strong profits in 2012. We have been working closely with the senior management team at Positive Solutions for the past few months and it’s clear there is a natural cultural fit between our two businesses that bodes well for the future.”

In July Intrinsic’s management bought out its shareholder, Lloyds Banking Group, while Sanlam and Friends Life remain shareholders.

The transaction is expected to close in the third quarter of this year, subject to approval from the Financial Conduct Authority.