Planners miss out as accountants fail to make referrals
Financial Planners may be missing out on many possible client referrals for auto enrolment due to accountants failing to recommend specialist advice.
Nearly six in ten accountants (58%) surveyed in a report by employee benefits adviser Helm Godfrey said they do not recommend that clients speak to a specialist adviser about auto enrolment.
Just 42% did suggest clients seek a financial adviser.
The study said accountants are often the primary source of advice when it comes to auto enrolment compliance.
Research by the National Employment Savings Trust found 74% of small businesses will turn to an adviser for help with auto enrolment, of which 59% would choose their accountant, rising to 70% for employers with four or fewer staff.
But Helm Godfrey suggested, based on its research, that many accountants may not be equipped with the specialist knowledge required to provide the advice their clients need.
The report showed:
• 56% of accountants said they are telling all SMEs to choose the government’s NEST scheme, without apparently researching whether this would be the best option for them
• 43% of accountants admitted to an auto-enrolment knowledge gap being their own biggest challenge when it came to advising businesses.
• 41% of accountants said they had difficulty navigating the detail of auto enrolment
• 32% said they had concerns about finding the right advice for clients
Steve Wood, Head of Auto Enrolment for Helm Godfrey, said: “When you consider that the majority of practice-based accountants we interviewed told us that fewer than 25% of their clients have begun the auto enrolment process, there’s going to be a lot of small businesses coming to accountants for advice in the coming year, but many of them may not be equipped with the specialist knowledge required to provide the advice their clients need.”
He said: “The complexity and scale of the task means that many small employers are simply going - or being pushed - to NEST or one of the other ‘Master Trust’ pension schemes that have been set up to meet the demand for auto-enrolment schemes; often without any consideration for their (or their employees’) particular needs. One size does not fit all and offering advice on selection of the most appropriate scheme can be an invaluable benefit that accountants can offer to their clients.
“Accountants may think supposedly ‘low cost’ pension schemes will always be best for their clients, but this is not true. Some low-cost schemes can be time-consuming and/or costly to administer and may not be best value for the employees, depending on the nature and make-up of the work force.”