On Platform Annuity Solution Justine Randall Head of Partnerships

Aegon Direct Openwork Simply Biz/Verbatim Sesame Platform 1 Platform 2 Spire Recent joint ventures

3 Market Opportunity for Investment Annuity The potential market £135bn of mass affluent and mass market pension funds will mature in the next 5 to 10 years Risk Pension Fund £ Income Drawdown £3.8bn Investment Annuity £0.6bn Conventional Annuity £8bn Enhanced £2.4bn Fixed Term / Variable £0.3bn 2011 Sales Results The retirement market is set to grow substantially over the next 5 years due to the baby boomer generation coming up to retirement. Now represents a critical time to capture retirement funds Strictly Confidential

4 Market Opportunity - Platforms The potential market In H AUM grew by 11% to over £190bn - £50bn of these are pre-retirement pensions Platforms Assets Under Management Platforms 45% of platform new business is pre-retirement pensions 26% of current invested platform assets are pre- retirement pensions Fund Supermarkets There are currently 29 live platforms. Estimations of future AUM growth on platforms is 18% p.a for 2013 and Strictly Confidential

5 Market Opportunity – Platforms over the next 5 years The platform market is projected to grow rapidly over 2013 and 2014 in terms Of AUM as IFAs move existing assets onto platforms and steadily but more slowly for ( see table below ) Of new AUM onto platforms, 45% of these are expected to be pension assets moved by transfers The number of platform players is expected to remain steady at around but consolidation is expected. 14 platforms currently have over £2BN AUM with the largest having around £45BN ( Transact and Cofunds ) Overall market (BN) Growth AUM for year Growth Pension assets % market growth AUM18% 12%9%8%

6 The Opportunity for “On Platform” Annuities Over £35bn platform assets are pre-retirement pensions + growing Conventional annuitisation is still mass market route c 70% This represents an “exit event” for platforms Loss of revenue stream / client ownership circa 7% p/a for platforms Loss of funds under management Loss of investment control for client / lack of consolidation Strong potential for inflows from IDD switchers

7 The Opportunity for “On Platform” Annuities Solution is to provide “on platform” annuity Client can remain invested via MGM platform annuity solution Platform can continue to earn, funds remain in control Recycle TFC and income into client account Ease of doing business for IFA Can be white labelled or MGM branded Could be via MGM FIA if limited fund choice required (mirror funds) Financial Advisors can protect their fee based business model with an investment linked annuity wrapper enabling them to maintain funds under management over a longer lifecycle.

8 On Platform FIA Accessible via Platform Prevents funds exiting platform on crystallisation of benefits Offers funds to suit client Generates mortality credits through mortality pooling MGM could white label as platform own brand annuity solution Flexibility of income for client % benchmark Potential for investment growth in decumulation stage via platform Guaranteed income for life

9 Financial Considerations Platform continues to earn in decumulation stage for assets under management IFA continues to earn by fee charging for assets under management Wider on platform proposition appeals to broader range of IFA’s including at retirement specialists Client pays product fees to MGM

MGM FIA – On Platform Annuity 10 Product has exactly the same functionality as existing FIA Wider range of funds possible Accessible via platform link to MGM site Can recycle tfc and income into client account Crystallisation event a formal date and funds moved officially into MGM FIA from accumulation vehicle Extension of earnings lifecycle for platform, new client for MGM Ease of doing business and ongoing client management for IFA

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