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Auto-enrolment could be the next big opportunity, but are wealth firms ready?
by James Phillipps on Aug 29, 2013 at 10:29
It’s been hard to avoid the government’s £3.5 million auto-enrolment campaign, which has been ratcheted up over the summer, with the likes of Karren Brady and Theo Paphitis cheerily declaring ‘I’m in’.
The Dragon’s Den stars may be enthusing about the ever-expanding corporate pension market, but are wealth managers ready to seize the opportunities it is throwing up?
The latest tranche of companies falling under the scheme, firms with 1,250-1,999 eligible employees, come on board on 1 September in an ongoing multi-year programme. While bigger companies introduced auto-enrolment earlier in the year, a further 38,000 medium-sized firms are due to comply next year so there are still considerable assets to fight for, both on an advisory and a discretionary basis.
Ashcourt Rowan group chief executive Jonathan Polin believes that although auto-enrolment is currently in its infancy, the growth of the corporate pension market is set to drive massive inflows into the market.
He is positioning his firm to benefit from this on both the financial planning and investment management side.
‘We are a good five to six years away, but this will be one of the biggest drivers of fund flows for the investment sector and if you can build in one’s own platform into the workplace, it gives people the ability to do DIY and have an advice proposition. It could be a powerful driver of growth over the medium term,’ he said.
Jamie Shepherd, chief executive of Courtiers Investment Services, says the company has been growing its employee benefits team, adding that a number of discretionary managers have moved out of this area in recent years, which has created considerable opportunities.
‘It is a massive opportunity,’ he said. ‘We are looking for quality growing schemes that have new members joining and then we see that as a great way to upsell our private client services to the owners and directors who have sufficient funds under management.’
‘We are capturing the next generation of up and coming high net worth individuals and we get lots of cross-referrals between our employee benefits and private wealth teams, which has been very beneficial to the company.’
Smith & Williamson is taking a different approach, focusing on small to medium-sized employers, helping them choose the right scheme manager and providing advice to their employees.
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