Our Fund Governance Group stands in the customer's place, aiming to make sure the funds we offer are appropriate and perform as expected.
Our Funds Promise
Aegon's Fund Governance Group has ultimate responsibility for ensuring that we meet our Funds Promise commitments to customers:
- We aim to offer high quality funds which meet their objectives.
- We monitor funds to check if they perform as expected.
- We take action if funds don't meet expectations.
- We give them the facts they need to make decisions.
Our Funds Promise applies to Aegon funds available to UK investors. These funds typically have a name starting with 'Aegon', 'WS Aegon' or 'Scottish Equitable'.
How our governance process works
The Fund Governance Group is responsible for governing Aegon funds. To do this it focuses on four key areas:
Each fund has a mandate that sets out its aims and how it intends to meet them. The Fund Governance Group ratifies the mandate of any new fund, making sure it can be managed in line with expectations and is likely to deliver good customer outcomes.
For non-insured funds, like our Risk-Managed Portfolios, it ensures compliance with MiFID II and PROD principles for target market, suitability and transparency of reporting.
The Fund Governance Group uses a framework to deliver on our promises to customers and provide assurance to our stakeholders. The team operates processes and controls which identify whether funds are being invested as customers have been led to expect, and highlights if funds are not delivering good customer outcomes.
The Fund Governance Group uses a risk-based approach taking account of Aegon's strategic objectives, as well as the requirements of our key stakeholders:
- Customers
- Regulators, and
- Shareholders
Our funds are generally designed to be held for five years or more – so our fund governance focuses on long-term expectations.
If a fund persistently fails to meet the agreed criteria, and we believe these reasons are systemic, the Fund Governance Group will recommend changes, including potential replacement.
Manager monitoring and responsible investment
We also score our key fund managers based on their ability to meet our minimum expectations across five areas of responsible investment:
| Responsible investment category | Minimum expectations |
|---|---|
| 1. Responsible investment governance | Ensuring robust and adequately resourced governance is in place |
| 2. Voting and engagement | Driving active engagement and voting, informed by material sustainability issues |
| 3. Climate change | Supporting our climate ambition and net zero commitment |
| 4. Industry advocacy | Using their voice to drive systemic sustainable changes in the economy |
| 5. Diversity and inclusion | Improving representation for better decision making |
Find out more by reading our Responsible Investment Framework.
Changes to funds or managers can be made for a variety of reasons, not just performance. However, our guiding principle is to ensure that changes help us meet our Funds Promise commitment to investors.
The Fund Governance Group may recommend changes to our solutions, such as our default or multi-asset options, if monitoring suggests these would improve customer outcomes. For example, this could mean updating the asset mix or making changes to the funds that make up a portfolio.
The Fund Governance Group may also make changes to fund ranges, like the One Retirement fund range. These decisions consider the specific objectives of the range, so a fund could be removed from one range and retained in another.
The Fund Governance Group will also assess the materiality of any changes, and whether communications are required for you as an adviser and your clients.
This may mean communicating directly with all those affected, or for smaller changes we may post updates on our website instead.
There's no guarantee the funds will meet their objectives.
The value of an investment can fall as well as rise and isn't guaranteed. The final value of a member's pension pot when they come to take benefits may be less than has been paid in.
