Personal Pension  

Apfa: All employers need auto-enrolment advice

All employers will need advice to put their employees into auto-enrolment schemes, whether they have a current scheme or not, and this presents a sizeable business opportunity for advisers, according to the Association of Professional Financial Advisers.

In its auto-enrolment guide, Apfa emphasises the need for advice, in particular small employers who have had no previous experience of workplace pensions and who will need to auto-enrol their employees into a qualifying scheme and make contributions on their behalf.

The guide says: “It is not just employers without schemes who will need advice. Putting something in place for the first time may well be easier than the task ahead for those employers who already have schemes in place.

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“These employers will need to check that they meet the relevant standards to comply with legislation and if they don’t, either address the shortfall or decide whether or not a new scheme would be more appropriate.

“Employers whose staff salaries are spread across a wide range may also need advice to put in place two or more schemes to accommodate staff at all levels.”

Pensions minister Steve Webb writes the foreword for the guide, stating that all employers, industry, consumer groups and regulators need to make this happen but omitted to mention advice.

In June, Mr Webb said that the auto-enrolment regime has been set up such that “nobody has to pay for advice” when speaking at the launch of the Scottish Widows UK Pensions Retirement Report 2013.

When questioned how firms would fund advice on auto-enrolment, Mr Webb said: “Why do they need advice?”

Apfa said the guide will help its members take advantage of the business opportunity created by the introduction of auto-enrolment.

It said the guide will support advisers as they guide employers through the auto-enrolment process, from ensuring they are compliant with the new legislation to designing effective administrative systems.

Chris Hannant, director general at Apfa, said: “Auto-enrolment presents a real opportunity for advisers. Well over a million employers will reach their staging dates in the next few years, and many of these will be smaller businesses that have no previous experience of workplace pensions and do not already receive financial advice.

“Following a number of events Apfa has run with The Pensions Regulator, we have produced this guide to help our members navigate pension reform and understand the full implications for businesses.

“Advisers could consider offering advice on workplace pensions to small business owners they already work with and have a relationship with. We also think there may be an opportunity for firms to strengthen their existing ties with other professional advisers such as solicitors and accounts by providing group presentations to businesses.”