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AE: A stepping stone to the masses?

Chase de Vere is one of these. The national IFA firm renowned for its wealth management proposition, recently launched its revamped corporate advice arm which also incorporates the full range of employee benefits.

The company still partners with accountancy firms to deliver solutions for small corporate clients, according to Sean McSweeney, the firm’s corporate advice manager.

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However, it is not all plain-sailing for intermediaries advising on AE. Commission on workplace pensions has ceased as of this month and is likely to trigger some big upheaval.

Mr McSweeney said: “It will drive lots of corporate advisers out of the market. Even with us, we are an experienced team but we have had to adapt to the end of commission payments, and some of our advisers have decided to retire because of it. There are many advisers who made a comfortable living acting as a broker, but there is very little value in that for the client.”

He added: “I think clients will be willing to pay a fee to their corporate adviser because they are happy to do so with their solicitors and auditors. However, a lot of corporate advisers would not know what to deliver to clients because they have sold products rather than selling their expertise and experience.”

The ban on commission means adviser firms are now forced to formulate a clear strategy for pension revenue replacement and alternative remuneration growth, according to Mr McSweeney.

He said: “This is why we have expanded our corporate advice proposition to focus more on other areas such as benchmark and group risk. We calculated that the end of commission would represent a seven figure loss in revenue per annum.”

The work of a corporate adviser does not cease once a client is on board with AE. There is scope to expand the advice given to other facets of retirement planning, including salary sacrifice and traditional employee benefits such as health insurance and life insurance.

However, the extra work is not for the faint-hearted and could prove to be a time-consuming exercise that puts additional strain on an adviser firm’s business model, Mr Nall said.

He added: “Advisers have had to respond to AE because it might prove problematic to some of their clients. If they do not solve it, then they would seek the services of another adviser who would.”

“Many of the advisers I deal with are happy with their current pool of clients and do not want any more. It would be difficult to maintain a high contact business model if you are going to increase the number of clients.”

The question is whether it is worth investing time and resources to manage a corporate client relationship, rather than pass on the somewhat laborious business to another adviser company which has the capacity to handle the query.