18th November 2013

Advisers have to educate and partner with accountants

Automatic enrolment is a potential game changer for UK pension provision - bringing an estimated 10 million people into long-term saving for the first time. Successful implementation depends on the decisions made by 1.1 million micro and small firms who employ 30% of Britain's workforce. These firms need to make the right calls on what pension scheme they'll offer their employees, how they will start-up and administer the scheme, and how they'll advise staff members on pension saving.

As auto enrolment starts to take effect all the anecdotal evidence is that employers are turning predominantly to two sources of advice, advisers and accountants.

Many advisers, through years of pensions experience, are reasonably up to speed with the intricate nature of the legislation. Meanwhile many accountants are well aware of auto enrolment, but many do not have the expertise to deal with it effectively.

Research by The Pensions Regulator shows the vast majority of payroll administrators and accountants now expect to have some involvement with automatic enrolment into workplace pension schemes. However many are still unclear about key details of how the new system will work. Its regular tracker survey found 96% of payroll administrators and 95% of accountants anticipate helping clients with their duties as auto enrolment is introduced from 2012 to 2018. While awareness of the reforms remains high amongst all intermediary groups, including accountants and bookkeepers, the survey shows that many still have only a basic grasp of key issues.

These include the types of earnings to be assessed; what a pay reference period is; the duty to enrol workers who opt in during the postponement period (if used); and the types of workers who are eligible for automatic enrolment - namely employees and contractors. Levels of understanding were lower among accountants (60%) and bookkeepers (48%) compared to payroll administrators (77%) or trustees (67%), largely because they're more likely to be dealing with employers furthest away from their staging dates. Despite this lack of detailed knowledge, many had already had some form of interaction with their clients about automatic enrolment (62% of accountants and 38% of bookkeepers).

The survey results show accountants and bookkeepers were well aware of requirements such as the need to identify eligible workers, record keeping, but were much less clear about the need for employers to submit their automatic enrolment details with the appropriate government body.

What these facts highlight is the glaring opportunity that advisers have to educate and partner with accountants and pay roll specialists, to work together on an auto enrolment proposition.

Again those already involved in the auto enrolment process are highlighting that there is a clear willingness amongst employers to pay for advice for certain services particularly one-off tailored advice on setting up a pension scheme and on-going advice on the scheme.

The key is having a robust proposition and business hub which includes accountants to provide employers with the confidence that they're receiving the advice they need, and it's worth paying for.

If you've not approached your existing accountancy connections or even new potential alliances, such as pay roll specialists or middle ware providers, to discuss auto enrolment then the time to do so is now. They're already involved and they need your help. Remember they may even pay for your expertise.

For help developing relationships with accountants visit our professional connections zone. 
 

John Joe McGinley
Head of Business Brain October 2013

Pensions, Business Development, Auto-Enrolment