Leader: The auto-enrolment opportunity

October Retirement Strategy

With auto-enrolment beginning to be rolled out next year, plenty of debate has centred on possible opportunities for IFAs in the corp-orate space. This month, Retirement Strategy catches up with Now:Pensions, the new UK arm of Danish pension provider ATP, which hopes to make its own significant inroads into a crowded marketplace.

The provider has yet to unveil its charges, which will comprise an admin and fund based charge, although it says its focus will be on creating a cheap default fund service to the consumer. With no track record in the UK and without offering commission or any consultancy charging functionality, chief executive Morten Nilsson hopes a diversified investment approach and low char-ges will be enough to win a decent level of business.

The firm has used comparisons with Nest to garner plenty of press coverage in recent months. Like Nest, there is an impressive independent trustee board but the firm has no intention in taking on Nest in its roleas a scheme of last resort for smaller employers.

Where it does see an opportunity is in the huge number of DC funds in the UK, it calculates 46,000, many of which it believes are levying charges that are too high. In Denmark, the firm has produced decent annualised returns, 6.3 per cent net of charges between 2001 and 2011, and it is certainly one to watch when it launches early next year.

With pensions minister Steve Webb continuing to express his concerns about the misuse of ETVs, SNR Denton partner Andrew Patten explores when they can be useful to particular clients but urges extreme caution to any IFAs offering such a service.

Rachael Adams takes a look at whether graduates struggling with the weight of debt created by the Government’s new higher tuition fees will decide against auto-enrolment into a pension scheme. Experts have suggested graduates be allowed to use employer contributions to pay down their debt although others are wary about adding extra complexity.

In his first column as The Retirement Partnership managing director, Peter Quinton explores whether equity-based annuity products will take a greater market share over the next 12 months, given falling gilt yields and continued market volatility. He expects this to be the case in the advised space.

As always, any comments or suggestions for future issues can be sent to paul.mcmillan@centaur.co.uk

If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing