AEGON UK chief executive Adrian Grace has apologised for service and operational issues which arose following the £140 million acquisition of the Cofunds platform business but said the company is on track with its growth strategy.

Mr Grace said the life and pensions firm, which employs around 2,000 in Edinburgh, retains the confidence of its Dutch owners after facing big challenges with the integration of Cofunds in the first half.

The acquisition of Cofunds in 2016 was a key move in Mr Grace’s drive to build Aegon into a leading player in the platforms market.

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The company has been left facing expensive complications after migrating 400,000 Cofunds retail customers on to its systems over the May Bank Holiday weekend.

In a statement accompanying the parent Aegon group’s first-half results, Mr Grace noted: “The upgrade of the Cofunds retail book has resulted in service and operational issues for advisers and their customers, for which I am sorry.”

He said advisers and brokers had Aegon UK’s commitment that it was fully focused on resolving the problems as soon as possible.

Speaking later he noted Aegon had faced challenges such as unexpectedly high call volumes and technical issues regarding passwords that prevented some people accessing the system.

“I think we were overwhelmed if I’m being honest with the interest and the operational impact of what we did,” he said.

Aegon is grappling with a backlog of issues connected with the migration that Mr Grace expects it will clear over the next six or seven weeks.

He noted: “We have had to put a lot more people on it, over 200, to clear the backlogs and deal with the service issues.”

Aegon incurred £3m costs in the first quarter for operational resources and faces further costs.

The total bill will include compensation for customers and advisers and work on the fixes required. But Mr Grace is confident the costs will not run to tens of millions.

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Asked if the problems had made him less enthusiastic about the platform market, Mr Grace said: “It’s given us a lot of experience in things we should do differently next time but in terms of our view of the platform market and our strategy it hasn’t changed our view at all.”

Platforms are web-based services that allow advisers to buy and manage investments on clients’ behalf. Demand for such services is growing as people take more responsibility for saving for retirement.

Mr Grace expects £1 trillion assets will be managed on platforms by 2020. Aegon wants to be one of the five or six major consolidators in a market which includes 32 platforms.

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Further acquisitions are not on the agenda currently.

“For now our focus is very much on fixing what we have got and making sure customers and advisers get the service they deserve,” said Mr Grace, who reckons Aegon UK has been making good progress this year.

He noted: “I go back eight years to all I heard in this market was Aegon’s for sale and it’s going to be finished, when we had about £45bn of assets … We’re up to £171bn assets, which is growth from £145bn 12 months ago, so our trajectory is clear; what we’re trying to do is clear, our profits are in a good place.”

Aegon UK added £16bn platform assets in July after completing the acquisition of the Blackrock DC business it agreed in 2016.

It achieved €69m (£57m) underlying earnings in the six months to June 30, against €68m last time. Both the older book of traditional policies and newer platform services are profitable.

Asked about the Dutch group’s view of the UK business, Mr Grace said: “I was there yesterday updating on strategy and approach and they are very supportive, very confident in our strategy and continue to push me forward in terms of going for growth.”