Consultancy charging should be banned for auto enrolment workplace pensions says AWD Chase de Vere. The call comes as Which? has revealed it is writing to pensions minister Steve Webb calling for an outright ban on the practice.
Jon Dixon, corporate advice manager, AWD Chase de Vere, says rather than put the cost burden of implementation on employees, pensions advisers should come up with more cost-effective solutions to enable employers to meet their auto-enrolment obligations.
Which? chief executive Peter Vickery-Smith has warned Webb that high consultancy charges could increase opt-out rates. The letter follows a mystery shop exercise where Which? found some providers prepared to accept first-year consultancy charges of up to £450 per employee.
Dixon says: “To have the best opportunity to engage with workers and restore confidence in workplace pensions, schemes must have low cost and transparent charges and be focused primarily on delivering the best outcomes for employees
“While we understand that some employers, particularly in the SME sector, will have challenges meeting the expense of implementation and compliance, we do not accept that putting this cost burden on employees is a suitable solution
“Rather, we believe that the pensions and corporate advice industry must come up with solutions which are cost effective for employers and beneficial to employees.”