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Nest survey reveals IFAs winning race for auto-enrolment advice

by Daniel Grote on Jan 30, 2013 at 08:11

Nest survey reveals IFAs winning race for auto-enrolment advice

A survey by the National Employment Savings Trust (Nest) has revealed that companies are looking to IFAs above all other sources of advice as they cope with the onset of auto-enrolment.

Small and medium-sized employers who have sought, or will seek, advice, are turning to IFAs above other professions. More than two-thirds of employers with between 50 and 99 workers plan to use IFAs, a third will rely on their pension provider, 14% will use an accountant, and one in 10 will employ an employee benefit consultant (EBCs).

For employers with between 100 and 999 workers, IFAs again come out on top. More than half of respondents said they would use an IFA, compared to 41% who would consult their pension provider, 18% which would use an EBC and 14% an accountant.

Pension providers steal a slight edge for employers with between 1,000 and 4,999 workers, 49% of which said they would use their services, compared to 48% which will use IFAs. A third of those companies will use EBCs, 18% will use lawyers and 11% accountants.

Only for the largest companies, with more than 5,000 workers, do the EBC giants trump IFAs, with 47% of these firms planning to use their services, compared to a quarter planning to use an IFA. But pension providers emerge on top for this grouping, with 51% of large companies planning to consult them.

Nest said its research showed that the demand for advice would peak around the staging dates for different sizes of firms. ‘Expected reliance on advisers is greater at the early understanding stages of the process with more employers expecting to rely on payroll providers at the later stages, such as setting up and making contributions,’ said the report.

Personal Finance Society chief executive Fay Goddard (pictured) said research undertaken by the Chartered Insurance Institute underlined the importance of advisers in auto-enrolment.

‘If professional advisers can help alleviate some of the burden to employers and promote the value of long-term savings to employees, automatic enrolment will be a win-win for all,’ she said.

7 comments so far. Why not have your say?

Mrhbeats

Jan 30, 2013 at 08:30

66.6% will use an IFA

33.3% will use their pension provider

14% will use an accountant

10% will use an EBC.

Someone needs to "do the math".

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Daniel Grote - Citywire

Jan 30, 2013 at 08:45

Where the Nest survey mentions which advice source companies will use, they are not mutually exlusive - so some of those companies will be using both their pension provider and IFA, for example, Hope that helps.

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Kate Brookes

Jan 30, 2013 at 09:21

I did read a previous survey that intimated that we were all washed up bunch of has beens that nobody wants any more, and we were all on the road to ruin, so unfortunately I will have to take this 'good news' with a pinch of salt as well.

@ Mrhbeats On the figures from a report yesterday, I noticed that according to the figures some poor person complained to FOS about 0.21% of a pension plan, so I shouldn't take the Math too seriously, Maths doesn't make a good story now does it?

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Anitaki

Jan 30, 2013 at 09:36

As was proved recently, those commissioning any survey will always get the results they are paying to get.

A recent survey showed over 95% of turkeys thought Christmas should be abolished

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David Prior

Jan 30, 2013 at 09:47

What this survey doesn't show is that a very high percentage of smaller firms, with less than 50 employees, i.e. those who need advice the most in order to avoid tripping up and by accident not meeting the rules, will not want to pay for advice. These firms do not have dedicated HR departments and remembering to auto-enrol those who opt out every 3 years, whilst also reminding them annually that they can join if they wish, and picking up new entrants and monitoring varying pay levels to ensure the right contributions go in, will be too much for them

These firms will use NEST as the default and then be fined by the Companies who will be doing the checking - interesting that whilst TATA were the only bidder to apply to run NEST, 3 firms have bid to do the job of going round checking compliance and issuing the fines - guess where the profit is?

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Anitaki

Jan 30, 2013 at 10:14

@ David

Agreed. There is no point in commissioning a survey, not to get the result you are paying for. Then of course, contact a reputable firm such as Citywire to get free publicity for your findings.

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KRW

Jan 30, 2013 at 11:01

As has been mentioned the smaller companies who most need our help and guidance will not pay for it. Nothing to see here move along.

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