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Jamie Clark: Mind the auto-enrolment advice gap

The auto-enrolment gap between firms and advisers is widening  


Over the last seven years or so (has it really been that long?), I have spoken to thousands of advisers about automatic enrolment.

When I get the chance, I will often ask the room if they are involved, or intend to get involved, in giving help and advice to employers around automatic enrolment. The problem is in a room of, say, 80 advisers, only five or six will raise their hands. And with worrying frequency, in smaller groups of around 20 advisers, no one will raise their hand.

This should not come as a great surprise to anyone in the industry. The automatic enrolment rules are really complicated.

Advisers who want to get involved with employers to advise on automatic enrolment will need to have a fair level of knowledge around the rules and what they mean in practice. They will also need technical support for those questions and queries that they cannot answer themselves. Advisers will need to learn how to deal with corporate clients if they have not done so before – and have the resource to deal any resulting enquiries.

They will also need to work out what advice and services they will provide and how they should be charging for these.

The Government ban on consultancy charging makes these charging issues more difficult and many advisers have taken the decision to not get involved in advice to employers. If they do get enquiries, they may pass these to another adviser – a perfectly reasonable and realistic conclusion.

What all this leads to is a widening gap between the demand for the help which all employers need and the number of advisers who are willing and able to provide that help. Unfortunately, in my experience, this advice gap is starting to look more like an advice chasm.

Some advisers are looking over the edge of the chasm and are recognising the potential opportunity but they also recognise that they will need help and support in developing their corporate proposition.

The good news is that help and support are available from at least some provider firms. But advisers, like employers, will need to prepare by engaging with those providers as soon as possible. From 2014 onwards, when huge numbers of employers reach their staging date, it will be easier for those adviser firms which have already built a robust, profitable corporate proposition to take full advantage of the opportunity.

There are positive signs, with adviser firms being set up to take advantage of the opportunity that automatic enrolment can bring.

With an increasing number of employers reaching staging and fewer advisers in the market, the potential for those adviser firms that can offer a well thought out proposition to employers will be consider-able. For advisers keen to get involved in corporate advice, bridging the advice chasm could take a lot of work. It can only be a good idea to seek any help required to build the foundations.

Jamie Clark is business development manager at Scottish Life 



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