L&G ends exclusive deal with Cofunds

Legal & General (L&G) has ditched its exclusivity deal with Cofunds, which could pave the way for a launch of its own IFA platform.

L&G, which holds a 25% stake in the fund platform, has maintained an exclusive distribution arrangement with Cofunds for its bond and pension wrappers since 2005.

But Mark Gregory, executive director at L&G, says the firm decided to terminate the agreement last month in an effort to improve choice ahead of the retail distribution review.

He says: “We recognise with the RDR that we need to have greater choice and greater flexibility, so I think it was sensible to break exclusivity with Cofunds.”

In an interview with Money Marketing, Fundweb’s sister publication, in November, Geoff Towers, managing director of platform and distribution at L&G, refused to rule out the possibility of L&G launching its own IFA platform.

Gregory said: “With regard to launching our own platform, things could change over time but, as things stand today, we are keen to continue working with Cofunds because it has scale and platforms are a classic scale play.

“But not every IFA is a Cofunds’ adopter. We are keen to talk to other platforms that fit into our target market about hosting our products.”

James Norton, director at Evolve Financial Planning, says: “The decision to break exclusivity with Cofunds is good news. It will give people more choice in choosing these products and it makes a lot of sense in the context of the RDR.”

IFDS holds a 24% stake in Cofunds, Threadneedle has a 20% stake, Newhouse Capital Partners 18%, Jupiter 10% and Prudential 3%.

Cofunds was unavailable for comment.