4th November 2013

Aegon: Auto-enrolment - your corporate Trojan horse

Auto-enrolment is the biggest opportunity the UK advisory market has faced for years. To paraphrase the great sage Edmund Blackadder, it's a six story opportunity with a large luminous sign on top saying big opportunity here.

So why are some advisers shying away from getting involved? It’s usually down to two things. Firstly, many still don’t understand what’s required for employers and employees. Secondly and probably more importantly, many advisers are unsure of how they can offer auto-enrolment advice profitably. Their big concern is how do I get paid?

But can advisers ignore auto-enrolment? What would existing corporate clients think of any firm that didn’t give them a warning or advice on the implications of new legislation, which is compulsory and brings with it the potential of large fines for non-compliance? How long would that relationship last?

Also, advisers aren’t paid for products. They’re paid for advice, and in the corporate market we’re reaching a situation where this advice will be at a premium. In 2014, the lack of adviser capacity to meet the demand of employers facing a staging date will put those advisory firms who have a robust and well thought out auto-enrolment corporate proposition in a very strong position indeed.

Knowledge is key. Every advisory firm (even to safeguard existing relationships) must have a working knowledge of the auto-enrolment legislation and the impact it has on employers. It’s wise to be an expert, at least on the key employer duties, such as how:

• do you work out your staging date?
• do you auto-enrol eligible jobholders and notify others of rights to opt in or join?
• to register the scheme with the regulator by the deadline (four months from their staging date)
• to make contributions on behalf of jobholders on an ongoing basis
• to continuously monitor for changes in employees’ status
• to keep ongoing records
• to make sure re-enrolment happens roughly every three years

This alone makes sure there are no nasty surprises for existing relationships and you can charge for this advice.

For more ideas to grow and develop your business visit www.aegon.co.uk/businessbrain

Retirement, Pensions, Business Development, Auto-Enrolment