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Aegon teams up with BlackRock to enter auto-enrolment arena

by Jun Merrett on Feb 06, 2013 at 10:54

Aegon teams up with BlackRock to enter auto-enrolment arena

Aegon has teamed up with fund group BlackRock to launch an auto-enrolment proposition to take on the National Employment Savings Trust (Nest).

Aegon is the latest in a growing line of life companies to launch an auto-enrolment offering that includes Legal & General (L&G), Standard Life and Aviva.

Employees will be auto-enrolled into the BlackRock-run Aegon Market Intelligence (MI) Savings fund by default.

Employers can offer staff the choice of moving out of the default option and into a higher- or lower-risk versions of the fund, as well as the 24 funds that make up Aegon’s Lifestyle range, run by the provider and third parties.

Simon Butler (pictured), Aegon head of workplace marketing, said the proposition would compete with the likes of Nest and L&G on price, keeping costs down by investing purely in passives.

Auto-enrolment began in October 2012 for companies with 120,000 or more employees, with smaller firms being brought under the reforms in stages until 2018.

Aegon is targeting firms with 50-500 employees.

6 comments so far. Why not have your say?

Chris Geeson

Feb 06, 2013 at 12:32

Don't you just love a bandwagon, and then they all jump on because someone said this is where you make money in the next 5 years.

I suppose many of the new processes we, as IFA's, are having to adopt is fueling the panic but as a corporate IFA of many years I'm astounded how many phone calls I have received asking me how they, the IFA on the phone, can become a corporate player at this late stage,

It seems that providers are having the same panic. Sounds of desperation ringing out methinks

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DS

Feb 06, 2013 at 13:16

You're right there Chris, I've experienced exactly the same thing. A number advisers have approached me asking how they can make the most of the opportunity, but few will actually be able to do it.

Usually it's the sheer levels of work you could undertake that puts them off. And considering advisers with no experience in the corporate arena are unlikely to attract large corporate clients, the value to their business, especially considering how long they might have to wait to implement a scheme, would be minimal.

Also, this press release tells us nothing. How will Aegon/BlackRock facilitate consultancy charging? What support will they give the employer in terms of their reporting and other regulatory responsibilities?

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Chris Geeson

Feb 06, 2013 at 13:31

What worries me more than pensions ability of those newby's who want to be a player is that a corporate IFA once involved with the client must know the rest as well, so communicating and advising on DIS, PMI, Income protection, Keyperson and Share protection are a minimum knowledge span. A huge amount of SME's will enter the market for the first time over the next 18 months with NEST or their own bespoke GPP what about all the other issues because all I'm hearing is a huge focus on grabbing a pensions market.

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DS

Feb 06, 2013 at 13:55

That's a fair point, and one that most will ignore I'm afraid. What they want is to offer a direct offer scheme, then say "here you go, theres your scheme, that's me done"

Repercussions will be felt by other advisers who are asked to come in and sweep up the pieces, and by the employer as they may well have paid a fee in the first place, and will have to pay further fee's to sort it out.

Couldn't argue about the size of the opportunity out there, I just hope it's the right people who pick it up.

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Mike Shaw

Feb 10, 2013 at 10:04

Three good points made above. Maybe the important focus for smaller IFA firms wanting to get into this market (or fearful of losing their existing small business clients to the bigger Corporate IFAs) is not to suffer from "eyes bigger than stomach" syndrome. It was easy to get into the GPPP/ Group Stakeholder market 10 years ago, but less easy to folow it through consistently and profitably. My firm has enjoyed moderate success in this field, while maintaining the emphasis on holistic advice for individuals at the upper end. However it has been very hard work to maintain a decent level of oversight for the ordinary memebrs of GPPPs, even having set up most schemes on the principle of 'direct offer' because those members naturally keep coming back with time-consuming enquiries. With the best will in the world, it is difficult to satisfy these needs when neither the employer nor the employee see the need to pay for service at a reasonable rate.

It's going to be the same this time round, writ large. It will take a major culture change to persuade most small employers to pay for a sustainable level of advice, so small IFAs should indeed tread warily. One positive note is that for the first time employers may actually HAVE to seek advice from IFAs, just as they have had to use solicitors and accountants.

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TheFuture

Feb 11, 2013 at 09:44

Wow, a positive thread for once, Thank You and agree with all

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