For immediate release: Wednesday 10th September 2014
A staggering 93% of advisers say pension providers are cherry picking auto enrolment business according to new research conducted by independent financial researcher Defaqto on behalf of NOW: Pensions.
Of the 244 advisers questioned by Defaqto, just 8% believe pension providers have effectively managed demand for auto enrolment services so far this year while over two thirds (68%) claim that some have managed while others haven’t.
When asked about the main issues they encountered, aside from cherry picking business, the main factors advisers gave were:
- Providers’ systems are not as efficient as they should be (58%)
- Providers are changing their acceptance criteria (55%)
- Increasing volumes are causing service delays (49%)
- Providers have been withdrawing from the market (47%)
- A lack of effective communication between payroll and pension providers (47%)
- Providers’ telephone support not as efficient as it should be (37%)
Looking ahead, over half (55%) of advisers lack confidence in providers’ ability to handle the demand for auto enrolment services next year. The main reason given was that volumes are so huge it will be virtually impossible to effectively manage it cited by 84%, while nearly two thirds (64%) say increasing numbers of providers will withdraw from the market putting increased pressure on remaining players. Over half (55%) expressed concern that pension providers’ systems aren’t as efficient as they should be.
Morten Nilsson, CEO of NOW: Pensions said: “As we go into 2015, the problem of “cherry picking” will worsen as fewer providers actively participate in auto enrolment. But, we remain committed to accepting all employers regardless of size on equal terms.
“To keep pace with growing demand, we’ve invested heavily in new online systems. But, as the market evolves we’ve remained responsive to feedback from clients, intermediaries and payroll providers and are introducing a number of improvements to our systems and service.
“In recent months we have increased the size of our client support team five-fold and average call waiting times for clients and advisers needing help are now less than 30 seconds.”
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For further information:
Tel: 020 3640 9075
Tel: +44 207 566 9720
Notes for editors:
Research conducted online by Defaqto in August 2014.
NOW: Pensions www.nowpensions.com
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.
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.
Defaqto is an independent researcher of financial products, focused on providing intelligence to support better decision-making. At its heart is the UK’s largest retail financial product and fund database which it maintains by collecting data from across the whole market, and uses its 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.