Over one in two (55%) IFAs who are either currently advising or intend to advise on auto enrolment are concerned about their ability to service the increasing volume of SMEs that will be seeking guidance in 2014, according to new research conducted by Defaqto on behalf of NOW: Pensions. To deal with this increased workload, one in five (21%) IFA firms plan to take on new staff.
In 2014, the number of companies reaching their staging date will increase eightfold with 30,000 companies alone staging over a four month period in mid-2014.
Terry Barnes, Director of Harrogate based Budge & Company said: “The volume of employees that will hit their staging date at the same time is huge and the reality is that there aren’t enough IFAs to assist them. This, combined with some employers leaving auto enrolment to the last minute and providers closing their doors to business, is cause for genuine worry.”
A staggering 86% of IFAs anticipate that growing numbers of pension providers will not offer their auto enrolment schemes to SMEs leaving many with a last minute panic to find a provider.
The market opportunity
Despite worries about the volume of work, two in three (66%) believe that auto enrolment represents a good opportunity to grow their business over the long term.
Of the 264 advisers questioned, nearly half (47%) are currently advising SMEs on auto enrolment while nearly a third (32%) intend to advise or are considering advising. Just 17% don’t intend to advise.
The main reason given by those not planning to advise on auto enrolment is that it’s not profitable business cited by two in five (42%) while just over a quarter (27%) consider the administrative burden too heavy.
Supporting advisers o help advisers deal more efficiently with large volumes of work, NOW: Pensions has recently launched a new online sign up service for auto enrolment that requires no lead time.
By logging onto a secure section of the NOW: Pensions website, advisers can fill out an online form on behalf of their client. The form covers all information needed to set up a scheme and takes a matter of minutes.
At the end of the process a participation agreement is produced which the IFA can submit online on behalf of the client without the need for a wet signature.
Once the online documentation is received, NOW: Pensions provide implementation details to the client within 24 hours.
Morten Nilsson, CEO of NOW: Pensions said: “The majority of advisers see the huge potential that exists within the auto enrolment market. But, to effectively manage and maximise this opportunity, slick, automated processes are essential to keep administration to a minimum.
“We know that many SMEs are going to leave sorting out auto enrolment until the last minute and in this environment, lead times of three to six months are unrealistic. With our online sign up service, advisers will be able to confidently process large volumes of clients quickly and easily with no lead times. They will also have the comfort of knowing that we will accept all employers and all employees.”
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