Auto-enrolments optimists and pessimists

Our discussions with advisers reveal roughly two camps when it comes to auto-enrolment. Some see the reform as fertile ground that will give them a reason to talk to their business owner clients. Others believe that their GPP business will no longer be tenable as the new reform coincides with the requirement for consultancy charging. The latter group believe employers will inevitably go to Nest and simply not pay for advice.

Obviously IFAs know their local markets and client bases well. But perhaps some of the pessimism is driven by looking at the problem with too narrow a focus. If advisers are able to present themselves as a trusted source of expertise with knowledge of all the auto-enrolment requirements and other benefits, then it may be a lot easier to charge a fee for compliance. They could link up with accountants to do so. Advisers could then make the connection between auto-enrolment compliance and an overall cost controlled benefits strategy. Part of the challenge may be for IFAs to understand where they fit into the process and how they can develop a role in helping link the different functions such as HR and finance with payroll systems and ultimately provision of the pension. In fact, it may not matter whether the pension provider is Nest, an established pension provider or the two in combination, if the adviser can charge a fee. It may also be in providers’ interests to help IFAs with this adjustment in thinking as well as business processes.

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