A Conservative MP has expressed concerns advisers would “laugh” at some people approaching them with auto-enrolment concerns.
South Thanet’s Craig MacKinlay made the comments during the work and pensions select committee hearing into auto-enrolment this morning (10 February).
Among other things, it covered the consequences of auto-enrolment on families who employ nannies and carers.
Mr MacKinlay said: “The first port of call will be Nest for many, but the amounts involved will be two and tuppence in the early years.
“Do you think the professions are leaving themselves open to offering advice they shouldn’t be giving because they are not properly registered with the Financial Conduct Authority?
“I think the professionals could be crossing over a line in actually giving that advice and that is a worry.”
Giving evidence to the committee, Sara Graff, a chartered accountant who runs Taxing Nannies and Taxing Carers, agreed this could be a concern.
She said: “I did seek advice from the ICAEW when I was looking as to how I could suggest to my clients that maybe they wanted to use a particular pensions company, but still giving them total choice.
“I did take that advice as to what I am able to do and what I am not able to do, but it is a very fine line and it is actually a line that I am not interested in crossing: I am not an IFA, I am not interested in being an IFA.
I am not an IFA, I am not interested in being an IFA. Sara Graff“That is not where my skillset lies. We do have an issue there.
“We feel safe with Nest because it is government-backed, but whether that is giving advice or not I wouldn’t know.”
Mr MacKinlay responded: “An IFA, if you said I’ve got a nanny employed, would you like to have an interview with them and suggest a great market that is out there - they would laugh at you.”
Ms Graff agreed that IFAs would not be interested in that sort of business.
Aileen Broomfield, who employs a carer for her aunt and was also giving evidence, added: “I actually looked at the company that Sara was using and you can look at their frequently asked questions and it said that if you need some advice it is £325 plus Vat.
“That is three times the annual contributions in one go for just a slightly different question.”
With 1.8 million small and micro employers through staging from now until 2018, auto-enrolment is seen by many as a great way for advisers to ensure their firm’s growth for the next few years.
An adviser survey from Aviva in November found that a third of respondents saw this as one of the biggest growth opportunities this year.
However, when asked why they were not currently operating in the market, the most common answer was it was not part of their core business at 45 per cent, while 19 per cent of advisers said it was not deemed profitable enough and 14 per cent put it down to a lack of qualifications and expertise.
