Advisers will not be able to fail to make money from a ready-made supply of new business when Nest and auto-enrolment come in because employers will be desparate for their services, says Robin Ellison.
Explaining that it will be a “criminal offence” for employers “to help people to opt out”, the Pinsent Mason partner predicted there will be a surge in demand for corporate advisers to companies of all shapes and sizes.
“Most IFAs will be so unbelievably rich in four or five years time and the reason is that the government at our expense will be taking out full page ads in both the Sun and the Times saying to employers that you have got to do something about this compulsory pension provision.”
“Employers will be confused and frightened because of the threats of penalties and the fact that you can, in theory, go to prison for not doing this properly. The Pensions Regulator is as we speak hiring 300 policemen in Brighton to go travelling the country to make sure employers comply with all this. Employers will be terrified and that is an opportunity for a decent salesman to say: ’Guys, here’s a product. We will take the worry off you. Just sign here and panic not.’
Tim Gillingham, director of corporate adviser Citrus4Benefits, echoed Mason’s sentiment that new business opportunities would be likely to arise, adding that he was already seeing a demand for information on the proposed pension scheme in his meetings with clients’ employees.
“There is no doubt that employers are more aware of what’s going on and they are asking for more help and advice so there is a good opportunity. The thing we are finding when we do presentations to employees – current employees – is that we can update them on everything that is going on, which will either reassure them or make them more worried,” said Gillingham.
“The non-pension scheme members will be invited to presentations and we will talk about the level of basic state pension which they don’t know, we’ll talk about the increase in retirement age and we will also then talk about Nest. So we will say to these people, today you have a choice. In 2012 or whenever it applies to that company we will see more people starting to engage in schemes that the companies are running.”