Carey Pensions' Christine Hallett discusses the first year of auto-enrolment and highlights the upcoming opportunities and challenges.
Helen Morrissey: Auto-enrolment in 2014 brings a host of challenges and opportunities. Can you give me a bit of insight as to what these might be?
Christine Hallett: I think the challenges and opportunities are different for the advisers, product providers and employers. Many employers see it as a burden, and some of them don't understand it at all.
They have to understand how they can afford to give additional remuneration to the workforce. In addition to that I think there's a lack of understanding by employers in terms of this is absolutely a requirement and they're compelled to comply.
It's actually quite complex because there are a lot of triggers that they have to monitor on an ongoing basis because things can change each month. There's a real requirement for employers to get advice.
Coming on to advisers, the challenges is that a lot of them don't understand how they can provide a proposition. We have been working with advisers in this area. Many say, "I'm not into this space because I deal with high net worth individuals; I'm only interested in the executives and the directors."
When you challenge that and say: "Well okay, but all of those directors and executives run companies, and they have an obligation to provide a pension scheme for their workforce so how are you assisting them in complying with that? If you're not, then another adviser will come in and there could potentially be a risk of them securing individual executive's business too."
The challenges for the advisers are very much about how do they create a proposition that is feasible and cost-effective and they can add value and charge for the work that they do?
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