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Advisers could help SMEs install Nest for free, says Govt-backed scheme

Nest is urging advisers to consider helping small and medium-sized businesses to set up the Government-backed scheme free of charge ahead of their automatic enrolment staging date.

Nest is engaging with advisers ahead of an anticipated “capacity crunch” between April and July 2014 when more than 12,000 employers are due to begin auto-enrolment.

Nest managing director of customer and proposition Graham Vidler is encouraging advisers to help SMEs set up and run the scheme. He says advisers could charge an upfront fee for the service.

If an employer is unwilling to pay up front, Vidler says advisers could offer to install Nest for free and then provide other advice services which the employer would pay for.

He says: “We think there is a big opportunity for advisers to install and run Nest for small and medium-sized businesses.

“We are seeing a real interest in the market for this ‘delegated access’ service and we plan to pilot some training with advisers to explain how this can be done.

“There are various ways advisers could charge for a service like this.

“For example, they could charge a fee per service or operate as a ‘loss leader’, either charging a lower fee or installing Nest for free and then providing a wider range of advice services to that employer in the future.”

Syndaxi Chartered Financial Planners managing director Robert Reid says: “I am totally against the idea of operating as a loss leader.

“We should be charging people up front for what we do.”


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There are 53 comments at the moment, we would love to hear your opinion too.

  1. I’ll go first. I can’t pay the gas bill with loss leaders.

  2. Absurd – how many Stakeholder schemes were set up on the same basis which earned us nothing?
    Besides someone pays us for us it will not be our loyal clients.

  3. This flys in the face of RDR, fair charging and TCF.

  4. Roman Duzinkewycz 1st February 2013 at 10:11 am

    Perhaps this guy is working for nothing as well then? Where do you find these folk? What part of this makes any sense to an adviser trying to earn an honest living and trying to get the best deal for the workers????

  5. You could not make this up.

    First we are told take unlimited lifetime liability
    Then we are told no more commission
    Then we are told charge a fee

    And now we have it – the endgame – advisers should work for free

    This from the organisation whose huge set up costs are funded by an indefinite 1.5% charge on all contributions – which sounds very like commission to me!

  6. We are finally there. No commission, no fees and then no IFA sector. Who wins?

    1.The consumer
    2.The banks and insurance companies.

    Even the FSA must know the answer to this one!

  7. Yet another joke. FSA say we can’t cross subsidise our businesses – what are loss leaders?

    How about the NEST employee’s work for free until the set up costs are paid off instead of charging £1.80?

  8. Employers get people in to do PAT testing for free do they? What about health & safety advice, that’s free too? Employment law advice is also just given away for free is it?

    Too much has been given away free by advisers in the past which is why people value it as such. Free stuff is what you get off a website or from a bloke down the pub, and there’s no protection with that if it proves to be incorrect.

    You worry about your pricing Mr Vidler and we’ll worry about ours

  9. if you work for a govt entity paid for by the tax-payer, with DWP trying to fight your corner, this is eminently sensible. If however you operate in the real world you might like to clothe and feed your kids

    Foot in mouth disease

  10. I will happily provide freeNEST advice to the mass of SME’s out there, but only if the FSCS Levy is provided at a zero cost to Advisers….. works both ways !

  11. Oh and another thing…….FSA/RDR forbids any cross-subsidising. So this is unworkable

  12. If only …No can do, Im affraid… FSA has outawed cross-subsidy, you see!

    If I was to do this my other clients would be paying for my resources!!

    Beware of unintended consequences!

  13. I would but unfortunately that would be cross subsidising wouldnt it and we know what the FSA thinks of that!

  14. The FSA try to put us out of business with RDR, the regulators increase all their charges, and now NEST seek not only to take away one of our traditional sources of business, but want us to advise on their product free of charge.

    NEST is a product which is generally more expensive and less flexible then other schemes. I would have to compromise my own principles and contravene the FSA principle of giving BEST ADVICE.

    I think I will go and cut my wrists, at least my family will be financially secure because of my life assurance. It is certainly becoming difficult to provide for them by my IFA activities.

  15. cross subsidise one client with the commission, sorry, fees from another?

    has he read anything about RDR?

    why isn’t he asking the big EB firms and providers like Standard Life to do this for free?

  16. My car needs some expensive repairs. I’ll see if the garage fancies doing it for free. After all, they’ll probably be able to charge me for an MoT later in the year; maybe even a couple of new tyres.

    If they’re so keen on advisers supporting SMEs and encouraging the use of Nest, maybe they should pay for it. Why, the cost could even be covered from the charges they take from the members’ funds. I’m surprsied no-one has thought of this revolutionary approach before.

  17. How do these people get these jobs? 1st February 2013 at 10:21 am

    Brilliant idea. Here’s some more equally helpful suggestions:
    NEST MD urged to provide his services for free..
    Banks urged to provide mortgages for nothing..
    Accountants urged to do accounts for nothing…
    FSA urged to self implode (ooops, sorry got carried away with that one)

    Heres another way of putting it:
    Advisers urged to make a loss initially in the hope that they might be able to overcharge and make up the loss later on

  18. And if something goes wrong it will be the IFA’s fault and a pound to a pinch of Sh1t it will. No fee income and ALL the responsibility, these folks have no idea

  19. Is Mr Vidler a comedian in his spare time? If so his ‘act’ needs work. Oh, and If he is I bet he receives a fee…

  20. Nest and the government might be removed from the compensation culture if things go wrong but IFAs are not. Sorry but I would not consider this for one minute. It makes a good soundbite but the practical implications would be madness. Goodluck to any IFA that does though I suspect not many would want to expose their businesses or reputation to such risks.

    We have been seeing many businesses over auto enrolement recently but it is a commercial arrangement charging upfront fees and those clients understand that. The days of free advice or cross subsidy are long gone.

  21. This is scandalous ,. The persin whois reccommending this has a signifant secure salary im quite sure ,AN ARROGANT individual id say. this behaviour totallly undervalues the advice we give as advisors and the ongoing advice we will be asked for . Itsnot straight forward and as always the government have made the pensions more complex than they already are

  22. FSA and the government should have foreseen this. They have been warned about that lots of people and companies would not be willing or unable to pay.

    I am waiting eagerly to see how this pans out!

  23. Surely this gets away from the whole point of making consumers realise that advice isn’t free and has to be paid for. Between this and Now pensions using their ‘marketing’ budget to pay advisers (where does that budget come from if not from the charges?), it seems that everyone is trying to break the spirit of RDR whilst keeping to the letter of it.

  24. What a total idiot!

  25. This guys clearly lives on another planet!! His attitude is not just pre -RDR, it’s pre – regulation! Foolish comment by a clearly inept individual who does not posses an ounce of commerciality!

    Try running NEST on that basis!


  26. Goldfinger D Megabucks 1st February 2013 at 10:48 am

    Bring back commission – all is forgiven !!!!

  27. Absolutely ridiculous idea, it will never work.

    And more so, if any advisors do feel inclined to give up their valuable time for free, and share their knowledge and experience for free, then please help those who really need it but genuinely can’t afford it. Volunteer with Citizens Advice or TPAS or similar. Not by “loss leading” for NEST or another overfunded public quango.

  28. “If an employer is unwilling to pay up front, Vidler says advisers could offer to install Nest for free and then provide other advice services which the employer would pay for.”
    If an employer is unwillng to pay up front, I will not be willing to give ANY advice.
    What “other” advice services is Vidler talking about?
    If the employer is unwilling to pay for one he is unlikely to pay for the other.
    I am not doing anything for free, whilst I am liable for LIFE, for any advice I give.
    Ask the FSA to pay back their bonus payments. That should cover it.
    Otherwise ask MA.

  29. One word and one word only is a suitable response to this ridiculous idea


    In addition to this response on the subject of the NEST scheme it is too expensive, too restrictive on the investment choices and too inflexible as it does not seem transferable, so a poorly performing provider retains your money regardless.

  30. Get MAS to do it they proivide refreshing FREE ADVICE – I don’t

  31. The phrase “Eff Off” springs immediately to mind

  32. If it is a “loss Leader” Vidler is after, he should speak to Tesco, they could put it on the same shelf as the milk or the baked beans.
    Tesco may even be able to afford it. Advisers cannot.

  33. Given all the extra costs advisers have had to shoulder. Why the **** should advisers offer Free advice ? if it was anyone else we can’t offer free advice we have to charge for it. B****y Cheek !!

  34. Best Friday laugh so far, yet another Gummint official without a clue.

    I spent a lot of time on Stakeholder for clients who were scared of being fined, complete waste of time because I haven’t met anyone who was caught and rapped over the knuckles.

  35. Just had to check it is actually February 1st and not April 1st.

  36. Bwwaaaaaaahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha

    I want nothing to do with NEST. It is a miss-selling disaster waiting to happen.

    What a joke. You honestly have to wonder if some of the people bumped into care in the community have ended up working in here.

    Utterly incredible statement from this idiot.

  37. And presumably the same employers will get free advice from other professionals:
    -their accountants perhaps, may be Vidler will expect them to run the payroll for free out of the goodness of their hearts?
    – their solicitors may be?
    perhaps Vidler can get them to do a freebie to cover the legals?

    Thought only the FSA valued advisers as gutter fodder, clearly there are others in influential places.

    Why doesn’t Vidler go the fulll hog and ask those advisers who have left the industry to do some free community NEST service whilst they draw their UB40 unemployment benefit? Scandalous represssion tactics, more out of touch with the real world than the bacteria of 4 Billion years ago.

  38. Well Mr. Vidler, I can say with a fair degree of confidence that the adviser community has not sat on the fence with this one!

  39. Looks like another excuse to blame the adviser community if Nest does not work.
    “It’s not our fault,those nasty little, fee grabbing advisers, refused to set it all up for free”
    “Everything would be fine if only advisers would play the game”
    “Apart from being liable for a lifetime, for any future misselling of auto enrollment , discovered through a thematic review, which is bound to happen, one would have thought these advisers, who are earning millions and all drive around in ferrari’s, could have helpled us out”
    ” I am sure the big 4 & Bigger lawyers give their service free to FSA when carrying out work & pursuing said advisers”
    One is so disappointed.

  40. The adviser community are being a bit unfair on this one. Fear not Mr Vidler, we’ve been advising employers free of charge re NEST for some time.

    How can we afford it? Well, to be honest, it only takes eight seconds to say ‘NEST has a dodgy 1970s opaque charging structure and awful fund choice, hence it’s crap, don’t go near it’.

    You can count on us mate, I can spare eight seconds every once in a while.

  41. Every day another loony statement from someone who has never advised, sold or recommended anything to anybody. We are watching our costs go through the roof and we get advised about offering loss leaders. They’ll be putting horse meat in beef burgers next……..and call it seasoning.

  42. I think the fundamental problem here is that whether paid or otherwise (the latter is theoretical) I do not see why it would be in Nest’s interests to have a professional planner involved in their product.

    This is because one couldn’t dream of recommending it in the first place. It has a complicated legal structure, no track record, uncertain charges, limited investment choice, restrictions on movement of funds all being run by a firm that specialises in making steel, land rovers and Tetley’s tea bags.

    That would make for an interesting suitability report!

    I recall when PADA was first launched and the head honcho was asked about the experience its staff had in pension implementation and administration. He responded that they had none but were ‘very enthusiastic’. This theme seems to be continuing!

  43. Have NEST not read the FSA’s comments about cross-subsidy and that fact that we as advisers are not supposed to cross subsidise one channel, client or class of business with another? Typically one hand doesn’t know what the other is doing…..

  44. Coupled with the DWP attack on consultancy charging to discourage SMEs from taking advice, this is an orchestrated attempt to ensure that the level of take up of NEST justifies the massive set up costs, which members are likely to be paying for the rest of their working lives if it is unsuccessful.

    It was made very clear when NEST was designed that the intention was to cut costs and exclude the adviser community, now the numbers are not adding up it is our fault for recommending superior solutions for our clients.

    As suggested on this forum, I would be happy to offset my fees against regulatory costs. How long before the FSA get involved and accuse us of not treating customers fairly by avoiding NEST? As far as I know RU64 still applies, maybe it will be modified to NEST as the default option.

  45. If I am going to put in something for free it will be with a proven provider that won’t come back and bite me on the backside. Not Nest who are not going to provide any software or admin support to the business. Or do i have to do that for free as well

  46. you cnnot afford anymore loss leaders as you are not allowed to cross sub clients . If the goverment wants a nest scheme then they should have thought of costs like everyone else in the world

  47. Peter Davies @ Create Wealth Management 4th February 2013 at 9:33 am

    What nonsense. The suggestion of working for nothing by the NEST chief is absurd. Financial Planners arent voluntary workers and the days of if I do X for nothing I might get commission on a sale of Y are well and truly over.

  48. Simple answer to this “NO! NO! NO!

    I am not employed by the government to make up for their inadequacies.

    I have made a very hard decision, every minute I spend on a clients file is going to be recorded and no one gets free service or advice in future, NO ONE!

  49. Christopher Bearfoot - White Horse Financial Servi 4th February 2013 at 12:26 pm

    Mr Vidler is not stupid. He has a CV that shows him working on pension matters for, among others, Which?, Aviva and in the House of Commons.
    Presumably he understands the issues better than most.

    About 6 months ago, in a video interview with Money Marketing’s own Aimee Steen he clearly set out the various roles that he felt IFAs could fulfil for their corporate clients particularly given the fact that, as he stated, for an employer to set up and install a pension scheme correctly (with the help of their adviser and provider) would take about 12 months.

    When asked what opportunities he saw for IFAs, he prefaced his response with “For advisers that successfully transition their business model through the Retail Distribution Review…” before going on to say that he saw that there were lots of opportunities for advisers to add value because “employers would be looking for help from their advisers” in matters not only to do with scheme selection but also the administration / payroll integration etc. He even gave the example of some employers already with NEST who had chosen to delegate matters to their IFA and which he held up as being a model he thought would work “very well” for IFAs “who would want to take a fee for performing that service for their clients.”

    Mr Vidler’s fault, therefore, would appear to be his naievety on the real implications of RDR.
    Setting aside the matter of PI liability for work carried out pro-bono or as a ‘loss leader’ (even if that were permissable), the real issue here is that we are looking to make the business of providing financial advice a true profession.
    In order to obtain our Statement of Professional Standing, we have requirements to adhere to ethical standards (something that that the banking industry seems to be exempt from).
    We have increased the basic level of qualifications for all advisers.
    And we understand that all work needs to be charged for, otherwise its value is not recognised.

    NEST was predicated on the basis that it would be a simple and straightforward option that could be used by employers without having to employ outside assistance.
    If only Mr Vidler would use his position to communicate more widely that actually pensions are quite complex and that employers would be wise to consider buying in outside expertise, then he might see the IFA community engage better with both his organisation and the employers that he is targetting, with the result being that everyone benefits.

  50. Mr Vidler should commission “Which” to do it for free.
    They are, after all, self styled consumer champions.
    They will benefit in the end as those who get the free advice will no doubt subscribe to the magazine.

  51. The world gone mad.
    All our fees go up – PI, FSA, FSCS.
    The FSCS spend millions hunting us down
    We take on unlimited laibility and provider of last resort
    And to top it all we should not charge
    And lastly if we give the advice for nothing and the FSA say it was incorect in hindsight legislation we have another bill.

  52. Err why?

    Typical quango talk.

  53. Ridiculous! We have a low cost platform that allows us to offer infinite more choice with proper advice AND build in an adviser fee which still works out LESS than the poor excuse for a pension run by an Indian car manufacturer. Why would we even offer NEST??

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