The retail distribution review (RDR) could deny small employers access to advice just when they have tough decisions to make about auto-enrolment, according to Aegon UK chief executive Otto Thoresen.
Thoresen (pictured) warned the RDR could have an even greater impact on small and medium-sized employers than on private clients, arguing advisers will move upmarket, leaving small businesses with no IFA.
‘Most of the RDR discussion has focused on individual clients, but the corporate picture is very important,’ said Thoresen (pictured). ‘We don’t know what impact there will be on advisers and small employers.’
Aegon has commissioned research into whether the RDR could create an advice gap for small business owners. The Financial Services Authority only extended its adviser charging rules to the corporate market in December 2009.
Thoresen said access to advice would be crucial for small businesses as they deal with auto-enrolment, set to come into force in October 2012. ‘Things such as auto-enrolment are all targeted at small and medium-sized employers,’ he said.
John Jory, director general of the Centre for Retirement Reform, said that businesses with less than five advisers should be excluded from auto-enrolment to prevent making the scheme unworkable.‘Auto-enrolment is the big prize and we must not lose sight of it,’ he said. ‘We have one chance to get it right.’