In last week’s column, I wrote about how important it was that the positive work the adviser community is doing to promote and build confidence in long-term saving was not derailed by high-profile negative cases.
Figures from The Pension Regulator’s (TPR) recent report suggest there is an issue developing with employers engaging with auto-enrolment (AE), and this is becoming increasingly evident as more small and medium enterprises reach their staging dates.
TPR’s market commentary for the 2015/16 tax year shows that 6,241 compliance notices, 2,002 fixed penalty notices and 122 escalating penalty notices were issued during that time period. Not too bad, given the huge number of firms in the AE space.
However, the figures for the past three months show that nearly 4,500 compliance notices were issued. This means that nearly half of the entire 2015/16 non-compliance activity has taken place in this most recent quarter.
Advisers I have spoken to are still reticent about AE, and implementation has not been trouble-freeIt is clear that the forecasts of the challenges for smaller employers from AE are becoming a reality. This is exactly where advisers can offer so much to help these smaller employers put schemes in place.
As advisers, you are used to working with this type of employer, and much of the technology, processes and systems needed to successfully implement AE are already second nature.
You also have the almost unfair advantage of your vast experience in getting to know clients, assessing suitability and running due diligence, which means that you are nearly certain to get it right first time.
Some advisers I have spoken to are still reticent about AE, and implementation has not been trouble-free. However, I believe that the galvanisation of the market by advisers will deliver enormous business and client benefits.
The Budget and the Financial Advice Market Review made it clear that the government and the regulator has pictured the workplace as a hub of financial advice. Getting involved with AE is your open door to countless new opportunities with both the employer and employees, which can only be a positive in terms of the development and profitability of your practice.
More generally, we are all aware of the problems with the practicalities of the savings and protection gap, and the negative impact these have both socially and economically.
AE is a fantastic opportunity for you to take the lead in ensuring things are better for the next generation of both clients and advisers, while at the same time building a strong, profitable business for yourself today. Such great opportunities do not come along too often; I urge you to grab this one with both hands. It really is time to climb aboard the AE train and enjoy the ride.
Ken Davy is chairman of SimplyBiz Group
