The managing director of PI Financial said economies of scale meant they could price more keenly. He also revealed the two firms had agreed the deal in response to fears that most providers had become “overwhelmed” by the market and were likely to withdraw.
Mr Sutcliffe said: “Our concern is that pension product providers are becoming overwhelmed and as such are withdrawing from the market.
“Nest definitely has a role to play, but it is inevitable that is a simple default solution. As an adviser you need something else as well as Nest, something that enables you to go beyond the default fund.”
His firm had negotiated with a number of pension providers after it became clear that an eventual capacity crunch would cause serious issues when smaller businesses reached their staging dates.
Mr Suticliffe claimed an end-to-end solution with one provider would ensure advisers are comfortable managing volume through the auto-enrolment process, while a spokesman for PI Financial added: “Too much choice is not a good thing in this market.”
Mr Sutcliffe confirmed Carey Pensions would be used as a default scheme, but that all PI Financial advisers would continue to search the whole of market before making a decision.
Adviser view
Chris Daems, director of London-based Principal IFA, said: “The size and scope of the auto-enrolment market together with the relatively small number of experts in this field means that strategic partnerships are fundamentally important in delivering a fantastic proposition to corporate clients.”