Advisers remain the preferred source of information for small firms when choosing a company pension, one year after the government's campaign for auto-enrolment first launched, new research suggests.
The research, carried out by polling agency Populus on behalf of the Personal Finance Society (PFS), revealed that more than two-thirds of micro (1-9 employees) and small firms (10-49 employees) do not currently offer their employees any form of workplace pension scheme, representing nearly five million employees not yet covered by employee pension.
Nearly half (49%) of small firms said they would turn to an adviser when choosing a pension, representing over half a million businesses.
PFS chief executive Keith Richards said: "Our research into small firms' readiness for the workplace pension reforms provides unequivocal proof that financial advisers have a major role to play in helping guide thousands of small and micro employers, covering millions of the UK's population, into auto-enrolment and ultimately pension provision for the very first time.
"The fact that since last year more small employers have introduced a workplace pension is positive and encouraging news. It's testament that the government's auto-enrolment television advertisement, featuring Theo Paphitis among other business leaders, has had some impact.
"However, it's clear that more needs to be done to educate especially micro firms that the auto-enrolment reforms will apply to them and they need to prepare sooner rather than later - possibly through a more focused awareness campaign."
Small firms fared better with auto-enrolment than their micro counterparts, with almost half (48%) now offering and contributing to a workplace pension compared with only 16% of micro employers, the survey found.
However, it also highlighted a lack of understanding of how the reforms work or confusion among micro firms that the reforms will not apply to them because of firm size the PFS said, after it found that about 6% of firms believed auto-enrolment was irrelevant to them.
When opting for financial advice, the PFS found, small and micro-sized firms were most prepared to pay for one-off tailored advice and setting up a pension scheme and ongoing tailored advice on the pension scheme than presentations and individual financial advice to employees.
The research found that firms with a turnover of more than £500,000 were a lot more likely to want to pay for advice services than lower turnover firms.
The PFS said: "Financial advisers who are looking to provide advice but are unsure about the firms' financial position, might want to offer them a narrower range of services."
The online survey, which was entitled Are we ‘in' yet?, questioned around 500 small and micros employers following the lauch of the government's auto-enrolment reforms in October last year, and its subsequent media awareness television campaign.
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