Smart Pension is one of the few Master Trust providers to still be actively engaging with the adviser community. This gives us a unique and current perspective on how this community is managing the challenge, and more importantly, the opportunity that automatic enrolment brings.
The number of small employers with eligible employees due to attain their staging dates in the next 12 months is staggering. Using a conservative estimate, The Pensions Regulator has assessed that there will be comfortably over 100,000 per quarter, and it is reasonable to assume that a significant proportion of these will decide that they want help in setting up and managing their scheme. Pensions are not core to their business and therefore they would rather pay an expert to help them out. This affords accountants, payroll bureaus and financial advisers an excellent opportunity to add to their client bank.
For accountants and payroll bureaus, stories are already beginning to emerge that some smaller employers, who presently run their payroll in-house, are beginning to wonder if now is not the time to look to outsource this to a reputable specialist. Automatic enrolment therefore may not be a one off exercise but could be the gateway to a long-term relationship.
For the independent financial adviser community, many of these employers will be 'owner managed' thus potentially creating the opportunity to utilise your wider product range once the initial automatic enrolment work is completed.
So, how to take advantage of this?
Firstly, be clear with regards to your proposition.
Exactly what is it that you will be offering the client and at what cost?
A menu based proposition often works best rather than trying to impose a one size fits all approach on all clients.
Are you going to offer to do everything or are you going to work in tandem with another adviser or the client themselves?
Many of the advisers we work with only provide part of the solution. For example, we regularly see IFAs working in tandem with payroll specialists as these services complement rather than compete.
Our research into the adviser market also shows clearly that a significant proportion of advisers are not engaging with automatic enrolment and are simply pushing their clients to do it themselves. Employers coming directly to Smart Pension do find this process straightforward and intuitive to use, however, this is not necessarily the case with all providers and therefore these clients may well prefer the help of an expert. It therefore pays to engage with those advisers who are not going to be helping their clients directly and work alongside them to ensure that their clients' needs are met and importantly are not being met by their competitors.
To this end, accountants and payroll bureaus should look to engage with IFAs, and vice versa, to provide complementary services. For obvious reasons, trying to engage with those in the same market as you does tend not to be particularly successful!
Are you going to 'advise' employers as to which provider to use or would you rather that they simply told you?
Smart Pension has researched the major providers on the market comparing costs, services and awards, and has published the results on our website which can be viewed here.
We have been told by numerous advisers that we work with that they have simply copied this table and passed it onto their clients to allow them to make their own decision as to which provider to use. As we are confident that our proposition stands up favourably against our competitors we are happy for you to do this. Do remember, however, that this is not an exhaustive list of providers and you should caveat your documentation accordingly.
Consider whether you are going to utilise the communication tools the likes of which Smart Pension provides or whether you are going to create your own bespoke suite. We can and do work with advisers in both scenarios.
It is crucial that you understand and have documented fully your proposition before going to market as a lot of employers will want to outsource the whole process and will need comfort that you, and where appropriate your partners, can do this for them.
Once you've done this, consider what networks you already have in place and how you can utilise these to promote your offering. Given the sheer number of employers staging in 2017, your local community is likely to be the most fruitful and, working with Chambers of Commerce and local business networking groups can be particularly rewarding.
Word of mouth will, however, be your best introducer.
There is an old maxim in sales and marketing which is still true even in today's digital marketplace.
"The more people you talk to, the more successful you will be"
Good luck and happy hunting!!