Keeping your auto enrolment proposition competitively priced for your clients
Paul Budgen
FinTech Co-Founder | International Financial Services | Strategy | Growth and Revenue | Pension and Retirement
The deadline for setting up a workplace pension scheme could be fast approaching for many of your clients. According to The Pensions Regulator, over 16,000 employers are due to set up a workplace pension scheme in this financial quarter. That figure is going to rise five-fold to 110,000 in the next quarter. Our research shows that 74 per cent of small and micro employers will look to an intermediary for support so there could be a lot of clients knocking on your door!
When they knock on your door, what are they likely to be looking for? When NEST was just a twinkle in the government’s eye in 2008, the mission we were given was to set up a good quality scheme that could serve millions of members and was freely available to any employer for auto enrolment, from day one. That mission hasn’t changed; what has changed is NEST now has over 2.5m members and over 30,000 employers signed up.
So what can we offer your clients? Our multi-award winning scheme and commitment to strong governance, through initiatives like the master trust assurance framework and star-ratings from organisations such as defaqto, stand testament to the quality we have ‘baked in’. That’s both in terms of what the scheme delivers for members and in the services we offer to employers and third parties setting up their NEST scheme.
We guarantee we won’t say no to any of your clients and we won’t ‘turn off the tap’ as volumes ramp up. And we are fast becoming the only major master trust that doesn’t charge employers a fee. This reinforces the need for NEST. We believe that imposing an employer charge would be at odds with our public service obligation to be open to all. Particularly as it would negatively impact small and micro employers the most, creating a barrier to entry and creating extra costs that they may not be able to afford.
As we don’t have an employer charge, it allows you to remain competitively priced so employers pay for your support and expertise and not basic administration.
We’ve also developed innovative approaches to ensure NEST is easy to use, whether employers come to us direct, via a payroll bureau or with the help of an adviser like you.
Our free online tool NEST Connect is a good example of this. Developed with intermediaries in mind, NEST Connect helps you manage all your clients in one place. It can help you tailor your proposition to meet the needs of your employer clients. Don’t just take our word for it though, check out what some of our NEST Connectors have to say about it. Over 4,300 intermediaries are already using NEST Connect, helping over 9,000 employers stay compliant. If you want to find out how NEST Connect could help you prepare for those clients about to knock on your door, see more on www.nestpensions.org.uk.
FinTech Co-Founder | International Financial Services | Strategy | Growth and Revenue | Pension and Retirement
9 年It would be good to pick this up with you Darren, let me know when you're in town and we can meet up. For others following this thread who may be interested, the restrictions on transfers into and out of NEST will be lifted in 2017 as per the timeline set out by government. Our award winning investment approach is designed around the needs of members and includes a focused set of alternative fund choices alongside our default NEST Retirement Date Funds. For full details on the investment performance and asset allocation of all our funds, you can read our Quarterly investment report [add link: https://www.nestpensions.org.uk/schemeweb/NestWeb/includes/public/docs/NEST-Quarterly-Investment-Report-July-Sept_2015,pdf.pdf]. We also explain how our fund of funds structure works and how the building block funds are blended for each member-facing fund in our Investment implementation document [add link: https://www.nestpensions.org.uk/schemeweb/NestWeb/includes/public/docs/Investment-implementation-document,PDF.pdf]. Thanks, Paul
Consumer Duty Champion | R-Day ?? = Better Outcomes for 92% of Workers | Helping CEOs & Workers become Net Zero Heroes
9 年Thanks Lee, I'm not opposed to a sweep up default for Employers, it's important that NEST is around in the event of disaster, but I have some genuine concerns over its restrictive policies - if these are still being applied. It would be better to identify NEST as the 7th wealth fund (in addition to the 6 funds to be created by LGPS assets). But with compelling evidence pointing to significant losses to upside from wider investment options, NEST policy to restrict transfers and investment mandates could cost north of ￡1m for typical savers that fall into their target audience. Paul has agreed that we should meet up for a coffee and this is something I'd like to discuss in some detail. Pension Computers saying NO in Workplace schemes is the single biggest risk to a savers chance of securing a decent pension or not. Just as George Osborne correctly identifies, investing in pooled assets as opposed to holding direct assets needs to be reviewed, this applies equally to individual savers, especially when the pooled/collective system fails to deliver for an astonishing 90% of savers! Pensions need bringing into the 21st Century where savers needs are put first and the Pension computer says YES.
Pension and Benefits Specialist with over 35 years experience
9 年Darren raises some really valid points. NEST should be seen as the last resort for employers, never a default, as there are so many better options for them and their employees. They may not have introduced an employer charge....yet, however with their debt continuing to increase, their 1.8% contribution charge looks here to stay!
Consumer Duty Champion | R-Day ?? = Better Outcomes for 92% of Workers | Helping CEOs & Workers become Net Zero Heroes
9 年Paul, I have a couple of observations that I would just like to clarify as we approach the watershed. NEST is publicly funded by tax payers money, so it wouldn't be true to say that Employers are getting a free service, or for that matter are the members. You don't report the sum outstanding in loans and the interest rate is also non disclosed. NEST operates a restricted investment mandate and limited investment mandate, restricting access to wider RPSM rules and it has no plans to change this. NEST operates a restricted transfer policy, once contributions have gone in, that's it, you'll not be able to access them again until 55. It's important to have a default to help capture everyone, but with the restricted features imposed I am seriously concerned that whilst there are schemes out there which don't apply these restrictions and include payroll services included in their costs, whether this could have serious consequences later. Your thoughts would be welcome.
Founder of the Academy of Life Planning & Planning My Life | Championing Values-Driven Financial Planning | Mentor to Independent Planners | Author and Advocate for Meaningful Change
9 年Great article Paul. And congratulations on your commitment not to have an Employer Pension Charge. It means that intermediated employers don't pay twice for advice and assisted set up, and is certain to increase your market share and much needed AUM.