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Regulator taps up networks to boost auto-enrolment advice

by Michelle Abrego on Nov 13, 2012 at 12:53

Regulator taps up networks to boost auto-enrolment advice

The Pensions Regulator (TPR) has met with IFA trade bodies, nationals and networks as it seeks advisers’ help in implementing auto-enrolment.

Auto-enrolment began in October for companies with more than 120,000 employees. Firms with 50 or less employees will begin auto-enrolment from April 2015.

Jeremy Leslie-Smith, TPR industry liaison manager, said the regulator was concerned smaller employers would not have the resources or understanding to comply with auto-enrolment and would need advice.

He said TPR’s research showed IFAs were not engaged with auto-enrolment, but the body had been meeting nationals, networks, the Personal Finance Society and the Association of Independent Financial Advisers in an effort to change this. ‘We’re seeing that advisers are not engaging [on corporate advice],’ he said. ‘We’re consulting [with them] to see if advisers are going to find it profitable or if it’s going to get to a level where there is no advice to be found.’

He said TPR would begin meeting large IFAs in the first quarter of 2013, and planned to meet smaller firms later in the year.

Paradigm Pensions founder Steve Bee (pictured) said there were around one million ‘micro employers’ in the UK and that auto-enrolment was an opportunity all advisers should take advantage of. ‘If you’re an IFA and you’re not doing corporate business, you’re missing the point,’ he said.

23 comments so far. Why not have your say?

Philip Wise

Nov 13, 2012 at 13:26

The bigger concern is whether employers are going to be prepared to pay for advice. We are putting together a service for micro employers, but the cost is going to be upwards of £1,000 for initial advice. Given the shortage of level 4 qualified advisers, we may have to charge a lot more.

So employers are left with a choice of doing something complicated and important without any help, or paying for advice.

Seems a bit late to be asking the question..

As for Steve Bee, maybe advisers arent doing corporate pensions because there's more money to be made elsewhere.

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JM Keynes

Nov 13, 2012 at 13:28

Let's hope these micro-employers can afford the fee - I mean, we couldn't possibly do it for nothing - that would be cross-subsidising, wouldn't it?

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Stephen Bostock

Nov 13, 2012 at 13:56

I am with JM Keynes - unintended consequences?

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GregB

Nov 13, 2012 at 13:59

We are trying to do corporate business but the micro employers out there cannot afford to pay the hourly rates we need to charge to cover our costs mainly driven by regulation. Steve Bee can suggest we are missing the point but perhaps a fair point would be to offer how much he would be charging for his expertise and knowledge as I know his hourly cost to speak is massively greater than my hourly cost to advise.

It seems that TPR are finally realising all these RDR dots on a paper create a picture and when you join those dots it will show at a time when more than ever employers need our help and advice our charges, when combined with product costs, have never been higher due to.........RDR.

It seems to have been a very quiet journey for some of our 'esteemed' commentators - it's no good shouting when you see the end of the road that we were on the wrong one!

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Enjoyer of early retirement

Nov 13, 2012 at 14:01

What a shame that TPR didn`t realise earlier that professional guidance might be needed. They may then have thought to make representations to the FSA to

prevent such huge reductions in Adviser numbers just at the time they were most needed.

Hey ho, back to the golf..........

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Stuart Rathbone

Nov 13, 2012 at 14:03

Great Biz opportunity for Steve et al who get involved, you cannot beat a legislative mandate on those who cannot escape other than by taking their ball home.

As for the “the regulator” (as if we have not got enough of them) here is my usual rant

- More can kicking.

Just another politico/bureaucratic placeman unwilling to grasp the nettle and tell the electorate that going forward that they will be increasingly on their own, we cannot afford what we have already promised and that they will have to pay by trying to get someone else to do the dirty work.

Until the glorious day that the S.H.T.F. the politicos/bureaucratic placeman will get in, get out with their swag avoid the thorny issues and hope they occur on the next incumbents watch.

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Graeme Ferguson

Nov 13, 2012 at 14:12

Nothing surprising with this article.... just an extension of stakeholder and what a success that was!!!

I have tried to engage with some of these firms, but they would rather wait until the final push off the cliff plus many of the smaller ones think that because their staff are lower paid, the last thing they would want to do with living costs increasing is get less money to spend but be very happy with their retirement planning!

I suspect the findings are that a large amount of firms are going to find themselves in a non compliance position and how are the fines going to be processed..... egg on some faces for sure.

GregB makes a good point about joining the dots together,,, 2 + 2 will not equal 5.

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Julian Stevens

Nov 13, 2012 at 14:14

Compulsory auto-enrolment into a still completely fudged up retirement savings framework (that the Conservative party in its pre-election manifesto said it was going to sort out but still hasn't) is something with which I disagree on principle. I shall therefore not be available to provide advice on the issue, even though there might be some possibilities for spin-off business with a company's directors.

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Well Now

Nov 13, 2012 at 14:40

What do Pension Regulators & FSA expect if we have all been pre occupied with Qulifications, RDR, making up for lost income, pensions especially group schemes do not pay.

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JonnieB666

Nov 13, 2012 at 15:29

I suggest all these employers phone MAS and get it all done for free!

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Stuart Rathbone

Nov 13, 2012 at 15:40

Good idea Jonny. The only downside is that they get over run, claim how vital they have become; demand a higher budget and we will end up paying for it.

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Stuart Rathbone

Nov 13, 2012 at 15:41

P.S. sorry about misspelling your name

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Jonathan Kirby

Nov 13, 2012 at 15:49

We set up various Stakeholders back in about 2001 for micro employers.

We did letters for them all to give to their employees.

We reminded them that new employees must be offered the chance to join.

We did one or two quotes for those who were interested.

We didn't enrol a single member and didn't make a penny.

Do you think we are going to get excited about the opportunities this time?

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Stuart Rathbone

Nov 13, 2012 at 16:10

Your a good man Jonathan, I seem to remember that the banks opened lots empty shells, the employers duly stuck the relevant notice on the wall and went about their business. The difference this time it that the employers have to pay; run a scheme or pay a find.

Not sure how good the thought police will be hunting the crim’s down but since the object is to get the politicos off the hook they will probably be a bit more enthusiastic than the last attempt (that and they can blame the money grabbing capitalist bosses for not looking after their employees).

If you have not already check out this video cutesy of Steve Bee

http://www.jargonfreepensions.co.uk/video/animatic.html

Should give good food for thought and spook a few companies into action.

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Scott Atkinson via mobile

Nov 13, 2012 at 16:26

If you don't know what to charge, you don't know what's involved so stay away from corporate work. It's a bit rich that the regulator asks for our help to engage on the back of the ridiculous RDR rules about earnings from pension schemes. Small businesses have no money to pay our fees do we have to take it from the members pot, which means they lose out. Go to NEST but expect no help or advice, they can't afford it.

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Frank Jurga

Nov 13, 2012 at 16:43

Workplace Pensions are a disaster and born of the fact that the destruction of S2P - which was Labour policy and pushed forward by a Lib Dem at the helm - has become the UK's biggest ever stealth tax. I'm not prepared to put up with that. Watch this space - starting at the beginning of January, I'm going to lobby for an early Election and for a whole new Financial Services Manifesto to be introduced by the winning Party. I'm not saying any more for now - email me at frankjurga@btconnect.com if you are really interested in your clients' financial wellbeing and want to learn more.

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Anitaki

Nov 13, 2012 at 17:15

Did anyone, any employer with 5 or more employees, ever get fined for the heinous capital offence of not displaying a "Stakeholder designation certificate" in a prominent place on their premises??

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JonnieB666

Nov 13, 2012 at 17:23

@ Stuart Rathbone

Misspelling my name is never an issue. I get many variations and not always complimentary. I agree that we would probably simply get stuffed with a higher bill if they thought they could get away with it. Another unintended consequence of RDR but then the MAS are not authorised or Level 4. Apparently they don't even know too much, if anything, about RDR and its requirements. I for one have no intention of providing any advice in this area without a fee being agreed in advance with half paid before we start any work to demonstrate a commitment and understanding by the client. As others have stated, Stakeholder was such a resounding success (not). I wonder if any of these people who make up these rules & guidelines work for free on a regular basis. We frequently do some work for free for long standing clients as I believe most IFA firms do and we will continue to do so but not for new clients who have generated no income for us.

Now if the Government want to start issuing vouchers for advice which advisers or adviser firms can then use to offset tax bills for example, that might work to some degree but I won't hold my breath.

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Philip Wise

Nov 13, 2012 at 21:54

Anitaki

There was one employer that was fined, and they had to try really hard.

@Jonathan Kirby

We did loads of similar "shell" stakeholder plans. We got paid by the employers for doing it - £750 a go. Dont give your expertise away for free!

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David Hatton

Nov 13, 2012 at 23:10

It's a lack of joined up thinking by the previous government & its Regulator in creating this fiasco & an ongoing failure of the current incumbents not having any balls to stand up and be counted in correcting these monumental errors to the industry.

Auto enrolment with mass market employer/employee advice requirements immediately after the implementation of RDR. Advisers culled through min level 4 qualifications, fee charging on a low cost plan.

Who would want too 1/ deal with it. & 2/ pay for it.

Where & what was the Pensions Regulators response to RDR?

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TheFuture

Nov 14, 2012 at 11:13

For an industry regarded as famously positive I am staggered at the negativity on this thread. I wholeheartedly agree with Steve Bee. Build and bundle some product, deliver something that these people need, understand and trust and get your share of the land-grab to come. Look at the statistics around the numbers of employers who want and will pay for advice on AE and for other servivices. RDR reduces competition, AE creates massive demand..... I love it!

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Mark Fletcher via mobile

Nov 14, 2012 at 11:27

Totally agree with comments above about the opportunity. If you take the time to look through the regulations it's going to be a nightmare for companies who don't have their own HR team to sort out themselves, and even for the HR teams to know if they making the right decision. Interestingly the regulator set up a whistle-blower helpline for employees to shop employers for non-compliance. This was taking calls even before AE came in in October. Companies aren't going to be able to get around it like they could with Stakeholder so I think there are good opportunities for fee-based advice, particularly via accountants and the like.

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PensionsManager

Nov 24, 2012 at 08:53

I do 'free work' for Pensions Advisory Service and have spoken to NHS staff about their pension scheme changes.

Micro employers will not want to pay fees but with some unregulated guidance should be able to cope with some of the big players like NOW or NEST.

Those that want more sophisticated advice and fund choice will have to pay or join a site like this and try to DIY I suppose!

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