Webb: Small firms will not need auto-enrolment advice
Pensions minister Steve Webb says that the availability of “fairly standard” products for auto-enrolment should means that small firms do not have to seek advice.
Many IFAs are gearing up to offer small firms advice as they begin to auto-enrol staff into workplace pensions. But, giving evidence to the work and pensions select committee this morning he said it is his “goal” to make the need for expensive tailored advice, especially for small firms and lower earners “unnecessary”.
He said: “I almost want to say I do not want most firms to have to seek out a lot of expensive advice. We are resourcing the Money Advice Service and The Pensions Advisory Service and so on, so there will be a lot of general information but there will not be specific individual tailored expert financial advice. Our goal is to make that not necessary, it would be crazy.
“Big firms will be able to afford employee benefit consultants to look at the market. But further down the track we clearly do not want small firms to be spending money on advice if that is not necessary. If what people are providing is a fairly standard product at a low charge I do not want firms to be agonising about whether they go with firm A or firm B because it will be a simple product.”
Conservative MP Harriett Baldwin asked Webb who would be providing advice if estimates that as many as 10,000 IFAs could leave the market as a result of the RDR.
Webb said: “Somebody on minimum wage just was not going to pay for IFA. It just was not going to happen. No IFA is going to touch them with a bargepole unless they are feeling charitable. The charge on a small contribution will not be worth having.”
For more on this morning’s hearing see Money Marketing’s live blog.