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PFS: Advisers must grasp ‘huge’ auto-enrol advice opportunity

Personal Finance Society chief executive Keith Richards

The Personal Finance Society has urged advisers to seize the “huge opportunity” offered by automatic enrolment after research revealed 76 per cent of micro employers have yet to choose a pension scheme.

The PFS commissioned a survey of 500 small and micro employers in June this year to determine awareness and how these companies will prepare for the reforms ahead of their staging date.

Some 49 per cent of respondents said they would turn to an adviser when choosing a pension scheme, while a third said they would seek advice on setting up and running a pension for their staff.

The PFS says the research also suggested some “confusion” among small employers about who the reforms apply to, with 6 per cent saying they didn’t think they would need to comply.

PFS chief executive Keith Richards says: “Our research into small firms’ readiness for the workplace pension reforms provides unequivocal proof that financial advisers have a major role to play in helping guide thousands of small and micro employers, covering millions of the UK’s population, into auto-enrolment and ultimately pension provision for the very first time. 

“It is a concern that some micro employers still believe that the reforms will not apply to them. Whether this is due to a lack of certainty or lack of awareness, the Government must do as much as it can to clarify that auto-enrolment applies to all employers, and that they should start preparing as soon as possible. 

“A decisive media campaign, particularly targeted at micro employers and encouraging them to seek advice if unsure, would do much to dispel any misunderstanding or confusion.”

Radcliffe & Newlands chartered financial planner Mel Kenny says: “For a long time many IFAs have been trying to draw the attention of SMEs and what better foot in the door than the need to talk about employer pension obligations?

“The key is to streamline this process to avoid it becoming a cumbersome and unprofitable exercise.”


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There are 17 comments at the moment, we would love to hear your opinion too.

  1. Tiny detail. We have canvassed hundreds of small firms, and guess what? They don’t want to pay for advice, so it’s a ‘huge’ bankruptcy opportunity.

  2. Tell them all to go to MAS, it`s no longer worth the carrot!

  3. “The key is to streamline this process to avoid it becoming a cumbersome and unprofitable exercise.”
    It already is. No wonder advisers are avoiding AE,
    not that employers need advice anyway, according to Steve Webb. In ten years time, what is to stop the regulator, under a new government, reviewing AE advice as unsuitable? It is not worth the fee.

  4. Huge opportunity for whom? We’ve done our own research and, yes, employers do want to do something, and, no, they don’t want to pay for it.

    Throw everyone into NEST seems to be the purveying small employer attitude as it absolves them of any responsibility but most importantly they don’t have to pay for advice.

    Are there better deals than NEST – sure. Has the system been set up so that the Government benefits by default – yes again. Auto-enrolment? Just another tax by any other name

  5. Terence P.O'Haloran 27th August 2013 at 11:40 am

    You mean ‘grasp the oportunity’ to waste endless hours and pecious resourses as we did in 1975 to 78 and ‘SERPS – CONTRACTING OUT’.

    Or perhaps you are frefering to 1988 to 1992 and the Personal pensions campaign? That resulted in the Pensions Miss selling ‘scandel’ invoked by actuaries watching their ‘living’ diminish and politicians and consumerists making a name for themseves.

    Its another ‘scam’ a ‘con’ , avoid it and let the ignorant promoters of this privatised tax carry the can when workers, like my children, find themselves obliged to part with 31% of band earnings in NI + NEST contributions.

    It is a loaded dice.

  6. This area if advice could very easily become toxic for advisers following the next change of government and regulator when yet another set of rules takes precedence.
    Keep away, the threats outweigh the benefits from this type of business

  7. Must? Must? Is this reporting or a direct quote? There are only 3 people entitled to use the word ‘Must’ – the Regulator, HMRC and the wife.

    Micro employers are hoping the whole horrible mess will go away and that eventually the Government will let them off the hook. If enough of them refuse to engage will TPR fine them all? How many will be forced to close as a result? How many will be put out of work? The best plan for small firms is to see whether their employees can go self-employed. Less than ideal, but as ever burdensome regulation acts like as toothpaste tube – something will just get squeezed in another direction.

    How many small firms will seek to shed a worker or two, to save the extra overhead? As I have said so often before – look at the lessons from SET. Unfortunately too many are too young to even know what Selective Employment Tax was. Auto enrolment is just SET Mk 2.

    Again the industry and the PFS yet again demonstrate their lack of commercial reality and nous, by thinking that this woebegone scheme is a viable proposition for either advisers or small firms. Some of us can certainly earn something by explaining to employers how to avoid the problem. That at least shows value.

  8. I personnally will not eventhink about trying AE advice. I have had small companies setting up GPPP and wpuld not pay a small fee. Large companies want the same as every one else FREE advice. Let them go to MAS

  9. Old enough to remember SET, Harry.

    Old enough to remember the SERPS cont out farce.

    Old enough to remember Gov’t PPP advertising campaign

    Old enough to remember PPP misselling retro goal post moving witch hunt

    Shall be avoiding AE like the proverbial plague

    Roll on my forthcoming retirement. All I need is 3 times my 1% p.a. regular income, buy my office building and I’m off to Spain without ever looking back.

  10. Stephen Rowland 27th August 2013 at 3:28 pm

    Ally – think you are right – probably 90% of Advisers would be right behind you if they could!

    There is only so much PERSECUTION a trade can take & I would suggest to the FAT CATS & REGULATOR that we are all getting fed up & to the end of our collective tether about how we are all being mis/ treated!


    God Bless MA/S!

  11. There are going to be millions of disgruntled workers in a few years but they can’t blame us, they’ll have to blame the government.

    Its not worth the time, effort and fuel costs in going to see a small firm.

    The financial services industry is dying a slow death.

    Advisers need to sell treble what they used to to earn the same which has promoted misselling not reduced it.

    The client is paying the same amc but also now initial fees so being charged twice.

    I honestly, hand on heart think pre rdr was better for consumers.

  12. Stephen Rowland 27th August 2013 at 5:05 pm

    Government / Regulator do NOT want a thriving Advisor Sector – all those nasty (EX) commission hungry salesman stitching clients up & saving them Tax – Have to stop that!

    Presume many would Agree it feels like DEATH by a thousand cuts & only eventually big names / business will survive!

    It’s just a matter of time & unreasonable Regulation really to make the Regulator’s & Politicians dream come true!

    Such a shame as this new generation haven’t got a clue Financially & will be sadly at a real disadvantage in future. Instead of hindering us as a profession – they ought to be promoting us – such short-sightedness on all their behalf!

    If only they realised the damage they are doing with their knee jerk reactions to everything – maybe they would think twice!

  13. I echo many of the comments above – however our anecdotal evidence is that firms will pay for advice should they feel it’s needed HOWEVER we’re not being contrived in positioning the facts so that it appears advice is necessary.

    IMHO there’s a lot of noise about the need for advice however it’s a maturing proposition (with legislation still changing) – some companies may choose to take advice…. however the Government clearly feel that advice isn’t necessary, TPR is helping employers ‘self serve’ and there’s GPP providers and master trust solutions which can integrate with payroll (and hence potentially do aware with the need/cost of ‘middleware’) – meaning that those employers who want to do it for themselves can.

    We also hear employers saying they want to do as little as possible, as late as possible…. (i.e. legislative minimum).

    The line we take with our enquiries is that we see this as an extension of payroll rather than a mass need for GPPs and that whilst we are willing (and keen) to do some of the work for them and we’ll charge accordingly and we certainly don’t see the day to day ‘compliance’ of the AE legislation as being our responsibility.

    Given the above, we don’t expect to see a mass uplift in GPPs (unless perhaps used as ‘top hat’ schemes) nor do we see a pot of gold in terms of adviser charging… we’ll pay for the work we do as and when it’s needed.

  14. Our staff are refusing to join NEST and arranging their own PPPs.

    We encourage staff to think of the total value of their package and to allocate it as they think appropriate.

    If one employee wants to maximise savings for a house deposit at the expense of pension, that’s ok. If another member wants to put 50% of pay into pension, that’s ok too.

    This way staff know that pay is a finite pot and they know its value.

  15. As an adviser who has been in practice throughout the period of change referred to in this article, my clients and no doubt those of other advisers have trust in what we do. However, I totally agree that the perception of our sector is less than positive in general. An independent consumer report issued recently supports that fact and I know also that my local MP has a rather negative view of advisers in general.

    Not only are there considerably fewer advisers left in the market compared to when I started, but there is also no comparison in the way we operate and deliver an entirely different service to our clients – surely its time this message was promoted to help educate and change perceptions.

    I, like most other professional advisers I mix with are fairly tired of the negative bloggers who claim to be advisers harping on about the past, and criticising everyone but themselves. No wonder we have over regulation and a negative perception when you read comments like those first posted below this article…please get over yourselves!

    I total agree with the campaign the PFS is promoting and I’m encouraged to read that they are prepared to do something constructive on behalf of the profession. It is about time we united and stop blaming everyone else for the challenges we face collectively – we have not been a united sector throughout the past 20 years and no doubt that has played its role in the regulatory challenges we have faced and would have weakened the lobbying position of those who have tried to influence on our behalf.

  16. Well George,it sounds like you are not keen to unite with anyone who may express a negative opinion or one which is not in agreement with your own so what exactly do you mean when you say “It is about time we united”?
    Would every united person have to agree with you?
    Is this a vain attempt to make us all pretend that the regulator is fair clear and not biased when it comes to advisers?
    I do not require the PFS to promote my trustworthiness, honesty or integrity, nor do I require them to advise me of where I MUST seize my opportunities. If you are one of those who do, go ahead support them. Who or what is stopping you?

  17. George

    You have dropped goolie. This piece is about auto enrolment. You have responded to the siren call of trust.

    On your point – is you local MP a client? If not why do you give a toss what he/she thinks? Indeed why are you even wasting you time talking to him/her?

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