With up to 20,000 employers a month being auto-enrolled from April 2015, adviser concern about a dearth of small companies willing to pay fees is misplaced, according to Ernst & Young director Malcolm Kerr.
Speaking at the Money Marketing Retirement Planning Summit in Cork last week, Kerr highlighted the large numbers of employers with less than 50 staff who will begin their staging dates between April 2015 and February 2018.
The Government’s recent decision to ban consultancy charging for auto-enrolment has led to concern that small firms will be unwilling to pay a fee for the advice they receive.
Kerr told delegates the sheer numbers of firms being auto-enrolled means advisers should have no worries about promoting a fee model.
He said: “When we talk about advice and whether employers will pay a charge it is completely irrelevant. Five thousand employers a day will be auto-enrolled, so the capacity in this market, no matter how much we charge, it won’t make a pin prick.
“This whole issue of we can’t give advice to employers about auto-enrolment because we’ve got to charge differently, frankly my advice is, you should go out there with a fee structure, if they do not want to pay it don’t give them advice. Simple as that.”
Kerr said the consultancy charging plan of employees paying a charge from their pension for advice given to their employer was “counter-intuitive” and rejected the suggestion that employers will not pay a fee. “I just don’t get it, if they’ve got the need they’ll pay the fee,” he said.