More collaboration will be needed for auto-enrolment to work, particularly between advisers and accountants, according to various industry experts.
The Pensions Regulator previously stated that over 1.3m schemes, representing 1.28m smaller employers, will reach their staging date over the next three years. This constitutes around 95 per cent of all the businesses in the UK, with staging dates disproportionately distributed across 2016 and 2017.
According to David White, managing director at Creative Auto-Enrolment, advisers will have to work more with accountants and get to grips with new IT systems. “Accepting the use of technology and streamlining of processes is crucial.
“Making the best use of processes and technology is the only way that I can see this [auto-enrolment] working.”
He told FTAdviser that if staging is not achieved, then supply and demand will get out of kilter. “We need people to plan ahead and work collaboratively and make the best use of systems available.”
Henry Tapper, director at pensions consultancy First Actuarial, commented that auto-enrolment compliance is mainly a payroll problem, being solved by payroll software companies issuing compliance software.
“The payroll bureaux are run by accountants, the accountants are now seeing auto-enrolment as a revenue generator- there is money in managing the employer’s risk.”
He added that there is a lot of demand for financial advice, but not much supply in this context, pointing out that there is a need for new technology-driven solutions enabling straight through processing and robo-advice on pension selection.
“We see packaged solutions emerging involving accountants, with book-keepers, payroll bureaux and advisers all working with providers
Mr Tapper added that there will be gaps and a lot of non-compliance, some employers will buy unsuitable pensions, but the system is unlikely to fall over.
“This is dependent on collaboration, the adoption of common data standards and a focus on getting the employer journey right.”