Top 50+50: Two-speed approach to auto enrolment by practices
Many smaller practices have ramped up to deal with auto enrolment for clients, while others are taking a more tentative approach, Accountancy Age research finds
MANY PRACTITIONERS bemoan the onset of auto-enrolment, and the debilitating impact of more and more red tape piled onto small and micro-businesses.
But when it comes to handling the pensions requirements for their clients, a large proportion of Top 50+50 firms believe they can turn a fee from the process.
Of the 111 firms surveyed by Accountancy Age this year, 76 responded to our question asking whether they had increased revenue as a result of auto-enrolment services. Some 44 of the 76 said they had increased revenues (58%), compared to 26 (34%) who had not increased revenues.
Only six firms said that their workload had increased, but without a corresponding increase in fees. All businesses must create a process to automatically enrol staff onto a pensions scheme, and for small enterprises the staging dates will run between 2016 and 2017.
What was of most interest was the range of reasons that firms gave for their current stance in dealing with their client bases.
Waiting game
Most smaller practices said that they expected their workload, and subsequent fees, to ramp up as clients’ staging dates approached over the next 18 months.
For example, Barnes Roffe said AE “was not a significant service sector for us at present – although it’s expected to become more so in the future”.
Wellden Turnbull and WSM Partners also outlined that it was still early days, with Wellden expecting an increase in work over the next 12-24 months. WSM said similar, but was “dealing with a lot of enquiries”.
Other firms were more explicit in terms of having strategies in place, including Mitchell Charlesworth. It describes AE as “representing a whole new service line”. The firm describes this as advice relating to pensions that sits outside the remit of an IFA, along with fees for processing pensions within payroll. Its IFA division has subsequently seen an uplift.
AE solutions in place
French Duncan said it had created an “end-to-end solution” around AE, having seen a “significant increase” in clients’ need for AE support.
A number of other firms, including PM+M, said they had seen “huge demand” for good quality and “cost-effective” AE advice.
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Duncan & Toplis describe 2017 as a “challenging” year, as the staging date for many small businesses.
Perhaps it is Scott Moncrieff that summarises the situation best, for advisers: “We are certain that there will be opportunities to help clients prepare for this.”
“These results are an important reminder that auto enrolment really can add up for accountants. Many are already starting to see that their clients are looking for support,” said Tim Jones, CEO of government-organised workplace pension NEST.
But what seems clear is that advisers, and their clients, are at different stages of preparation for AE.
“Over half a million small and micro employers are staging in the next 18 months. NEST’s research shows around three quarters of them want help, and over half of those plan to turn to an accountant,” Jones added. “You need to be prepared. We know that many haven’t thought about their auto enrolment proposition yet, but now is the time.”