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- £2.8bn of revenue at risk for advisers in sectors including accounting, head office support and business communications
- Accounting sector has the most to lose; £1.9bn of potential revenue could be at risk by 2018
£2.8bn of revenue could be at risk for advisers who fail to prepare adequately for the challenge of advising their clients on new pensions auto enrolment legislation, new research from the Centre for Economic Business Research (Cebr), commissioned by Creative Auto Enrolment, has revealed.
Its report, ‘Finding your way out of the auto enrolment maze’, found that auto enrolment provides a huge opportunity for the advisory market, with clients likely to need substantial guidance and support in navigating the new legislation, which requires every employer in the country to enrol eligible staff in a workplace pension over the coming years. Advisers operating in the accounting, auditing, financial management consultancy and employee communications sectors are just some of those set to benefit from an increased need for guidance from clients faced with tackling over 33 administrative challenges to get ready for auto enrolment.
However, with Cebr predicting that up to 10% of advisers’ revenue could be derived from auto enrolment-related activity over 2015- 2018, the report warns that advisory firms who perform poorly in the space could face significant risk to their income.
Companies in the accounting sector, which for the purposes of the report incorporates auditing, bookkeeping and tax consultancy, could have the most to lose, with up to £1.66bn of revenue at risk in 2015, rising to £1.86bn in 2018, when all businesses will have passed their auto enrolment ‘staging date’. Combined with the revenue at risk for companies dealing with head office support, financial management and internal communications support, the total amount of at-risk revenue is estimated to grow rapidly, from £2.5bn in 2015 to £2.8bn in 2018. And these figures don’t as yet take into account the potential revenue opportunity – and conversely, the risk- for IFAs and HR advisers, whose role in helping clients will be defined as auto enrolment is rolled out over the coming years.
The research was commissioned by Creative Auto Enrolment, a new company that has been launched by employee benefits consultancy Creative Benefits to help businesses respond to the auto enrolment challenge. Creative Auto Enrolment offers a comprehensive end to end solution that helps companies respond to all their auto enrolment responsibilities. In addition to carrying out the necessary set-up work to get ready for their staging date, Creative Auto Enrolment acts as a long-term partner, taking care of monthly ongoing duties including the categorisation of workers, calculation of pension contributions and communications with a company’s employees. Clients also benefit from a specially negotiated discount that Creative Auto Enrolment has arranged with Scottish Widows. Creative Auto Enrolment’s strategy is to work closely alongside IFAs and advisers looking to recommend an auto enrolment solution to their clients.
David White, Managing Director of Creative Auto Enrolment, which helps businesses meet their auto enrolment responsibilities, said: “Auto enrolment isn’t just a big deal for businesses that need to meet the new criteria; it’s also very important for the companies advising them. It’s a great opportunity to help your clients with this daunting task and boost profits accordingly, but there’s also a risk that if advisers are not armed with the right knowledge and advice for their clients, that they could lose valuable business.”
“Auto enrolment is approaching fast, yet many businesses haven’t thought about it yet. Advisers can add real value to their customers by saying ‘this is coming, here’s what you should do’. This guidance and advice is what will separate the winners from the losers in the advisory market over the next five years.”
Creative Auto Enrolment offers advisers’ clients the most comprehensive end to end solution for implementing auto enrolment, and undertakes all the preparatory work, manages a company’s auto enrolment responsibilities on an ongoing basis and provides advisers with the choice between support and guidance on selecting investment funds, or the freedom to choose this for clients themselves.
Further information is available at www.creativeautoenrolment.co.uk/advisers.