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MM leader: Gaining a different Perspective

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The RDR has seen a raft of consolidators spring up promising “economies of scale” to advice firms who want to get on with the business of advising.

The uncertainty of pricing an advice business, particularly when future trail is no longer a guaranteed indicator of value, has prompted some to question whether we are now seeing the death of the consolidator model. Some consolidator models have fared better than others, and it is fair to say that Perspective has had a more challenging year than most.

From an exodus of its senior management team, to being forced to defer payments to some acquired firms, to shelving flotation plans, the company has been scrabbling to put itself on a more solid footing.

In this week’s Money Marketing, we reveal how executive chairman Paul Hogarth plans to achieve this. A £6m restructure will see advisers take a 38 per cent stake in the business, which seems to have reassured member firms.

No doubt firms that have tied their future to the success (or not) of Perspective will be waiting with bated breath to see if this new and improved model will deliver  where the previous model has failed.

Is auto-enrolment collapsing?

The great financial planning Budget, as it is likely to become known, has meant that pensions are never far from the headlines.

The new pension freedoms, the practicalities over who will provide guidance and how it will be delivered have given advisers, providers and journalists plenty
to chew over.

And that was before pensions minister Steve Webb set the wheels in motion for collective defined contribution pensions to be included as part of the Queen’s Speech earlier this month.

But amongst all the noise, the Government’s flagship auto-enrolment policy appears to be coming apart at the seams. It was always going to be the case that big firms with HR departments would be on top of their auto-enrolment duties.

Yet for the firms who were due to stage in April and May, a different picture is emerging.  Providers estimate that up to a third of firms who should have staged in the two-month period have yet to do so. It is hard to tell whether this is down to ignorance of the rules or wilful non-compliance.

Only a large, punitive fine from The Pensions Regulator will address the issue, or else the Government is facing a policy failure of calamitous proportions in the build-up to the general election.

Natalie Holt is editor of Money Marketing – follow her on Twitter here

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Guide

Guide: day-to-day tasks ​— can your system manage?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. As well as highlighting what is required from a system to ensure it is up to the tasks, an overview of the following is also provided: data validation; data categorisation; employee communication; opt-in process; opt-out process; produce contribution schedule; contribution reconciliation process; upload of member data to pension provider; upload contribution to pension provider; manage salary sacrifice process; enrolment process; re-enrolment process; and management of increased employee queries.

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I think it might be relevant if I repeat a previous post:

    If you think there’s a problem now, just wait till firms with fewer than 20 employees reach their staging dates. The big employers probably embrace AE as it allows them to substantially reduce their pension payments. (I just wonder what will happen what will happen if the daft idea of charging NI on premiums becomes reality).

    The small employers (quite rightly) regard AE as a tax and are very wary about how much their contribution may escalate in the years to come – this is an expense over which they have no control – other than through employee numbers.

    The small firms will have 4 options:
    Non Compliance
    Wholesale opting out, by their employees
    A reduction in staff numbers
    Reversion to LOSC. (Labour only sub contract).

    And of course the ever growing ranks of the self-employed are not caught by this impost.
    One wonders if AE will have the same deleterious effect on employment as that other headcount tax – SET – had in the 1970’s.

    With the suggestions and proposals currently swirling around with regard to pensions, one may justifiably ask why bother at all if these curtailing proposals see the light of day.

    If the Government (any government) worries that people are not engaging with pensions they have no one but themselves to blame. The constant tinkering and uniformed meddling continues to erode confidence – with the public and the adviser community.

    Anyone ub=nder 40 contributing to a CDC will want their head examined. The Chancellors ‘big idea’ is nonsense. All he needed to do was to increase the Triviality limit to (say) £75k and leave the rest alone.

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