Pension providers have been accused of “misleading” advisers by turning away automatic enrolment business they had previously agreed to accept.
Tens of thousands of employers will reach their auto-enrolment staging date this year, leading to concerns of a “capacity crunch” as providers struggle to meet demand.
In July last year, Money Marketing revealed providers were turning away auto-enrolment business from companies who were within six months of their staging date.
Speaking at a seminar at the National Employment Savings Trust’s head office in London last week, Nurture Financial Planning managing director Simon Linstead said provider cherry-picking means choice will be limited for small and medium sized businesses.
He said: “Naively I thought there would be more options in the market than Nest.
“The biggest scheme we have is 250 lives with high salary levels – normally you would think that is a cracking scheme for a provider to take on. Every single provider turned it away within 24 hours. It is clear providers are cherry-picking business.
“The message we got from providers a year ago was very misleading. They said they were going to cater for certain schemes and then when the time came they changed their stance. That makes life very difficult for us as advisers and our clients.”
PSG Financial Solutions IFA Petra Griffiths said she was aware of other advisers who had faced problems securing terms from auto-enrolment providers.
Ridgeway Chartered Financial Planners IFA David Mills said: “I share the concern about the restrictive nature of choice in the market. Shoehorning everyone into one provider because there is a lack of choice in the private sector does not feel fair to the end client.”
Nest managing director of customer and proposition John Taylor said: “The feedback we have heard today resonates with what we have seen in the market.”