Auto-enrolment newcomer Smart Pension has raised £3.3m in capital from private investors, bringing its total capital investment since launch last year to £5m.
It has also appointed Duncan Howorth, former chief executive of the employee benefits arm of Jardine Lloyd Thompson, to its board of directors.
The master trust, which specialises in providing workplace pensions to small businesses, announced two other new board appointments: former lord mayor of London Sir Anthony Joliffe, who will be chair, and the scheme’s chief operating officer and former Pension Protection Fund member Peter Walker.
Mr Howorth said: “The success of auto enrolment has always been a passion of mine – and key to its success is supporting the millions of businesses and their employees entering the workplace pensions market for the first time.”
In May, Smart Pension bought a “six figure” stake in pension data transfer company Pensionsync. In the same month it joined a group of 14 auto-enrolment providers with Master Trust Assurance Framework accreditation.
Smart Pension chief executive Andrew Evans said: “We are on a powerful, upwards trajectory and to be announcing such high quality additions to our board together with a strong investment round at this key stage is a big vote of confidence in our plans to make Smart Pension the most efficient pension provider in the market.”
The firm’s owners now include fintech specialist Ed Asseily, Tom Valentine, co-founder of luxury holiday firm Secret Escapes, and William Reeve, an entrepreneur and investor who has backed successful startups such as Graze.com, Zoopla and Hubbub.
The fund is open to all employers, but focuses on small employers through their advisers, accountants and payroll providers. It charges the maximum member fee of 75 basis points.
Smart Pension has so far signed up 8,500 employers, and has 60,000 members. In an interview with FTAdviser in May, chief operating officer Peter Walker said the scheme was targeting half a million members. He declined to disclose the scheme’s assets under management.
Allan Maxwell, a business adviser and director of Corporate Benefits Consulting, said he had not come across Smart Pension, but was sceptical about advising his clients to sign up to the smaller start-up AE providers.
“I would be inclined to steer clients away from the smaller schemes. If you’re going to charge such a small amount, it’s all about economies of scale. So you obviously need a lot of members.” He said this meant failures and consolidation were inevitable.
“With the small schemes, if you pick the one that wins, fine, but there’s a risk that you pick the one that doesn’t. And my clients don’t want that hassle. They want to find a reliable scheme, and then get on with what they do for a living,” he said.
For that reason he said he normally recommends his clients use The People’s Pension, one of the UK’s largest AE providers.
However, he said that the involvement of high profile and experienced people in Smart Pension, such as Mr Howorth and Mr Walker, was reassuring. He added, though, that whether or not a scheme had Maf accreditation was not a major concern for him.
james.fernyhough@ft.com
