Aegon introduces advisor financing program

(May 25, 2004) The mutual fund dealer arm of Aegon Canada is joining forces with a bank to offer a financing program for advisors interested in purchasing books of business. Aegon Dealer Services runs the Money Concepts franchise in Canada.

The program, a joint effort of Aegon, Money Concepts and BMO Bank of Montreal, will help advisors take advantage of growth opportunities, the companies said in a news release issued today, by simplifying the process of buying a book of business from another advisor.

“Aegon Dealer Services believes that a financing program to help independent advisors acquire books of business is an essential support tool,” the release states.

“This customized financial program for the first time takes into consideration all the tangible and intangible assets of a financial advisor when putting together a financial package,” adds BMO’s Don Wither.

The financing initiative is also a response to industry trends, explains Aegon Dealer Services vice-president Scott Edgington.

“Increasing fees and infrastructure requirements have driven up the cost of running a planning practice, and many planners are looking for economies of scale to restore profitability to their practice”, he says.

“There’s a lot of interest from advisors who want to grow their business and from some that are getting near retirement and looking to exit the business,” Edgington added in an interview. “Obviously, people who have built up a business want to be able to sell it and we needed a facility to help with the financing.”

Edgington says it’s been traditionally difficult for advisors to obtain this type of financing, since it can be tricky to value the assets. “That’s why we joined with BMO, they have people in place who have expertise in valuing this type of asset.”

“There are certain situations where people want to get bigger and spread costs across a bigger base and they just need help with the growth,” he says. “Rather than doing it organically, they can buy a business and hit the ground running.”

“This broadens our suite of offerings and it does help us recruit new advisors,” Edgington adds. Aegon Dealer Services has more than 1,200 advisors in Canada.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com