View more on these topics

Steve Bee slams “out of date” Webb over small firm advice claims

Steve Bee has hit out at pensions minister Steve Webb for saying it his goal to make it unnecessary for small firms and low earners to seek advice over auto-enrolment.

Giving evidence to the work and pensions select committee yesterday, Webb said it would be “crazy” if most firms had to seek out expensive financial advice and that the similarity between vanilla products would mean advice was not needed. 

Paradigm senior consultant Steve Bee is behind a business which helps firms navigate auto-enrolment. He says choosing the right product is only a small part of what IFAs could help small firms with. He says while large firms have human resource departments to comply with auto-enrolment regulations, like keeping records on who is enrolled, who is not and why, small firms do not.

He says: “I sort of agree with Webb you need a scheme of a certain standard but that is only the start of it. To say IFAs have no place in helping employers comply with complex pensions regulations is nonsense, to say they only have a role in advising about products is out of date, it is only 2 per cent of it. The rest is compliance.”

Webb told the committee: “If what people are providing is a fairly standard product at a low charge I do not want firms to be agonising about whether  they go with firm A or firm B because it will be a simple product. I almost want to say I do not want most firms to have to seek out a lot of expensive advice.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. These latest musings from Webb just show how little he understands a) what is now his own legislation and the impact it has, and, b) that it is the regulation which needs simplifying not the products. He is more product orientated than a DSF branch manager in the 80s! It is the same problem we face when a low earner comes along with 2 SHPs with £2k in each they want to combine. I can’t say “That’s probably not a bad idea, charges and funds are similar, quick chat on risk and bill for £50”. Regulation means I have to treat it the same as combining two £500k pots, destroy a rainforest, write war and peace and so tell the lower earner I can’t help, when I could perfectly well. It is like having to be a GP to prescribe aspirin. These guys will never get it sorted whilst they have so little understanding in the first place and then every utterance they make is to get short term votes not long term savings.

  2. And Mr Webb thinks that planning for retirement is a simple straightforward task does he?

    Will he be held to account when a low earning employee reaches retirement and they get £100 pa pension – possibly not in line with what they thought they were going to get and certainly had they had advice at the outset their expectations would have been brought into line.

  3. it would be simple if they hadn’t made the stuff so complicated. it should be simple enough to have a light touch advice process

  4. And who will take responsibility when a small employer gets fined because of poor record keeping because they failed to understand what was required in respect of auto-enrolment?

    The Right Honourable Mr Webb?

Leave a comment