Much has changed in the world of corporate advice.
In a previous article, we discussed what advisers could do in the short term and how to construct their work to gain maximum advantage from areas such as automatic enrolment.
Now, the crystal ball gazing continues as we consider the medium and long-term opportunities for corporate advice.
While there is much opportunity in the current world to get corporate clients to get AE compliance and modernise group risk and other scheme designs, what happens after 2018 when the AE implementation work is done, pensions are made even more simple and the corporate client ‘land grab’ is over and the ‘farming’ starts? How will advisers offer support for corporate clients?
As I write, it is fair to say some advisers are already clear about what they will be doing. Repositioning themselves has already happened in the AE/platform space but other online/flexible/voluntary benefit specialisms are being developed.
Some of the most advanced are moving to complete repositioning as ‘Health and Wellbeing’ specialists while others are technology focused with online, multi-benefits purchase with pre-formatted or modular packages, often aimed at the SME AE clients who want to do more than just get through pension compliance.
So who is coming into the benefits world between now and 2018 and why will they want more than just compliance?
Recent business figures imply over the next few years, there will be over 70,000 restaurants, more than 48,000 computer companies, over 45,000 management consultants and 34,000 architectural and engineering companies with pensions for the first time.
The latter three areas could be termed as the white-collar professional segments where attraction and retention is becoming a key business challenge, they will want to do more than AE pension compliance. Interestingly, there will also be over 5,000 TV/film makers, over 150 logging companies, 670 meat processors, 370 dairy manufacturers and 1,383 watchmakers.
Smaller segments in specific areas are still worth pursuing, especially if affinity relationships exist, as the need for skilled workers could lead to attraction and retention problems for specialist employers.
For advisers with more traditional relationship offerings, which do not have online aspirations or platforms for AE, retaining on-going relationships with corporate employers, post AE implementation, has to be the aim.
Specifically, Group risk (group life is easiest initial sale in our view alongside the pension), Private Medical Insurance/Cash Plans broking and sales should now become routine rather than exceptional.
Remember over 97 per cent of employers do not have group life, approximately 99 per cent do not have group income protection and 99.8 per cent have no critical illness and so advisers who introduce these benefits will, in the main be pushing at an open door.
Advisers have always had the pension data enabling them to quote these benefits but in the post-pensions commissions world this gift and the size of the opportunity will be the natural start point for the on-going employer discussions.
Questions appear on the last page of this article.