The PlayPen lunch split 5/5 on the issue, advisers and lawyers reckoning that advice was not only a practical but also a regulatory “must have” before employers staged auto-enrolment.
In a regulatory context the division was on whether Steve Webb (who famously disses the need for advice) or the FCA (who regards employers with minimal employees/turnover and capitalisation as “retail”) were right. Steve famously hates lawyers and you can see why!
It was great to see a healthy turn out and with a 3/7 female/male split, we are looking a little more divers (thanks Jenny/Carol and Vivi). The bad boys- Simon and Derrick rightly pointed out that while the services IFA are looking to provide might better be termed operational support than advice, they are the obvious candidates for the hand-holding needed to get and stay AE compliant.
The question of whether the employers accountants were the obvious advisers was neatly sidestepped by the advisers who pointed out that accountants might be prepared to assist in auditing whether their client was properly conducting his employer duties but had no interest in the pension outcomes per se.
Perhaps most worryingly in the 90 minutes of our debate, the idea that employers might be looking for a workplace pension that maximised pensions for staff, was laughed out of court. If there was motivation for employers, it was fear of the Regulator’s stick and any talk of subjective ratings as to what counted for good were thrapped on the head harder than a plastic fairground crab.
My biggest worry at the end of the meeting was the uncertainty that surrounded the fate of the very small employer who seemed to have no status in the eyes of many around the table , greater than a retail customer. If employers are to not able to make purchasing decisions on their own then perhaps NEST , as the default , becomes the only choice.
If this is the consequence of the advisory gap and if, as many in the room suggested would be the case, NEST are the last men standing, then we might as well have continued with the NI funded S2P.
However, for those in the room who saw employers empowered to take their own decisions, either through a direct market or through sites such as http://www.pensionplaypen.com which allows a comparison between provider offerings, the concepts of reward and value were clearly not dead.
Perhaps our split decision is indicative of how finely poised the debate is. Will auto-enrolment be embraced by employers as a means to provide better benefits and improve reward or will it simply be a pain in the butt?
The answer may be determined by the direction regulation takes us. My hope is that it takes us away from the complex rules on duties that are strangling the debate and towards the sunny uplands of better retirement outcomes
Robert O Donovan