Small businesses face auto-enrolment advice gap
Regulator happy to accept a lack of advice for small companies, adviser says
Companies with fewer than 50 employees will struggle with implementing auto-enrolment due to a lack of advice, one adviser has warned.
Speaking at a panel session at the PFS Auto-Enrolment conference today (21 May), Steve Wood, senior consultant at adviser firm Helm Godfrey, said small businesses face a lack of proper advice.
“There seems to be an acceptance from the authorities that advice will not be available to smaller employers,” he said.
The cost of advice may appear prohibitive to businesses with fewer employers, but they will still have to meet their obligations for auto-enrolling their employees on the relevant staging dates.
There is a lot of information on the Pensions Regulator’s website, Wood said, but even then employers might struggle to make sense of their duties.
“I don’t think an employer will be able to cope with that on their own,” he said.
Business owners may, as a result, choose to just place their employees in the NEST scheme, Wood suggested.
“Whether that is practical or not, I very much doubt,” he said.
Peter Glancy, head of corporate pensions at Scottish Widows, said this could present an opportunity for advisers if they pitched their proposition in the right way.
“If they [employers] are left on their own, they might end up with a whole load of administrative burden that they don’t want,” he said.
If the price of an adviser’s service is low compared to the cost of dealing with the additional workload internally, Glancy said, employers might be more interested in seeking advice.