Employers lack the knowledge to make informed decisions about auto enrolment claim advisers

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For immediate release: Thursday 2 July 2015

A staggering 84% of advisers are concerned that employers lack the knowledge to make informed decisions on the appropriate auto enrolment solution for their employees according to new research* conducted by independent financial researcher Defaqto on behalf of NOW: Pensions.

Of the 248 advisers who responded to the survey, just one in five (19%) say that fund choice had been of importance to the client in the schemes they had written so far.  And despite the fact that most people will go into the default fund, advisers don’t see the quality of the default fund as a high priority with just 16% stating that it’s the most important consideration when selecting an appropriate scheme for auto enrolment.

Of the auto enrolment schemes that advisers have written so far, guaranteed acceptance was the most important factor for advisers cited by 30%, closely followed by the level of charges cited by 29%.

Morten Nilsson, CEO, NOW: Pensions said: “The vast majority of small and micro employers will have absolutely no experience of pensions and will be facing auto enrolment with a mixture of horror and dread.

“The advisory community has an essential role to play, guiding employers through the process and helping to ensure that the schemes they select for their employees are fit for purpose.

“We know that over 99% of auto enrolment members are finding themselves in the scheme default fund so it’s imperative that advisers interrogate the appropriateness of these funds. It’s a mistake to think that all default funds are the same as they have very different risk and return profiles.

“Poorly performing default funds with out of date lifestyle strategies can seriously damage savers’ retirement incomes and their significance shouldn’t be underestimated.”

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For further information:

Amy Mankelow
NOW: Pensions
Tel: 020 3640 9075

Notes to editors

*Research conducted online by Defaqto with 248 advisers between 1 June and 19 June 2015.

NOW: Pensions www.nowpensions.com @nowpensions

NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.

A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

In January 2015, NOW: Pensions achieved independent assurance of scheme quality in accordance with the new master trust assurance framework AAF02/07 introduced by The Pensions Regulator (TPR) in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW).

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Jocelyn Blackwell, founding partner Dunnett Shaw
  • Christopher Daykin, former Government Actuary
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors
  • Nigel Waterson, former Shadow Pensions Minister

Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

About Defaqto
Defaqto is an independent researcher of financial products, focused on providing intelligence to support better decision-making.

At Defaqto’s heart is the UK’s largest retail financial product and fund database – Defaqto maintains it by collecting data from across the whole market, and using the team’s expertise and insight to analyse this data and make it comparable.

From this, Defaqto creates a range of products and services – ratings, software solutions, consultancy services, data services, and publications and events – to deliver this information in a meaningful way.

Defaqto’s intelligence facilitates better financial decisions and greater effectiveness in the creation, management and distribution of financial products.

Access further information about Defaqto at defaqto.com

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NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods, SALT.agency