Aegon, Scottish Widows and Standard Life are advisers’ most popular providers of workplace savings platforms, according to research by The Platforum.
Its latest market report, found Aegon named a preferred workplace savings platform provider by 48 per cent of advisers, followed by Scottish Widows on 44 per cent and Standard Life on 37 per cent. Aegon and Standard were named as preferred provider by advisers of all sizes, while Widows’ votes came largely from smaller firms.
The second edition of the Platforum’s Workplace Savings Guide found Hargreaves Lansdown has the most corporate platform clients, with 78 set up as at Q2 2013, followed by Scottish Widows with 60.
Aegon, the most recent entrant to the market having launched its Arc proposition in September 2012, now has 17 schemes in place. Fidelity, Standard Life and Legal &General have 24, 25 and 12 schemes respectively, although their targeting of bigger employers means their workplace benefit platforms have greater coverage, serving 75,000, 50,000 and 48,000 employees respectively.
The report notes a static corporate platform market, following the decision of Aviva not to go ahead with the planned launch of the enhanced version of its Work:Life proposition, which currently offers access to the provider’s GPP, flex benefits admin, total reward statements, educational tools and an auto-enrolment hub. It also concludes that Paradigm’s Amber platform is ‘still not generally available as a proposition on the market’ as the provider is concentrating on serving its existing clients.
The report also flags up Lorica’s new money portal that allows aggregation of an employee’s personal finance-related products and services such as credit cards, bank accounts, mortgage payments and standing orders, alongside employee benefits.
The report found 39 per cent of employers interviewed in May 2013 intended to review workplace savings platforms in the next 1-5 years, 11 per cent were already in the process of reviewing the market and 14 per cent said they already had a workplace savings platform available to their employees or were about to implement. Of those polled, 79 per cent said they would consider expanding their workplace savings options.
Eight major workplace savings platforms were recorded as active in the UK market with total assets approaching £2bn. As of Q2 2013 The Platforum estimates there were 249 employers that had adopted a workplace savings platform. It concludes that auto-enrolment has displaced workplace saving platforms from the agenda over the short-term but presents real opportunity for change.
The Platforum managing director Holly Mackay says: “The Guide is packed with current information on the runners and riders in the market and provides detailed research and analysis of the key developments that have taken place over the last year. It also looks at where the market is heading and what the challenges will be to growth in the future. We size the market and look at employers, employees and the all-important levels of engagement.
“It’s clear to us, from industry feedback, that auto-enrolment is the number one priority occupying everyone at the moment. And that’s not going to change any time soon. The corporate savings platform market is growing, perhaps not anywhere near as fast as many providers had hoped and predicted, but growing nonetheless. More than 60 per cent of employers surveyed told us that they either have a workplace savings platform or intend to review them over the next 2 years – that’s a jump of nearly 30 per cent from this time last year. We expect pretty rapid growth from today’s humble £2 billion once we get through the AE challenges facing employers – we’d describe employer and provider sentiment as interested in a calmly pragmatic way!”
The Lang Cat principal and guide co-author Mark Polson says: “Those providers looking at the development costs of their corporate platforms might be feeling a little twitchy at the moment. The assets just haven’t materialised as quickly as boardrooms have been led to believe they would. That’s down to AE. We can all see that now. But that’s little consolation to the unfortunate proposition guys who have spent a shed load of money and now have to go face to face with the finance director and explain why they might have to wait another three to five years longer than they had originally expected to see any meaningful numbers coming through. However, I look at this in a different way. The older style systems that group pension schemes have been written on in the past are simply not fit for purpose post-RDR. Better to spend the money now on new-generation technology, and migrate legacy business over time, than find yourself having missed the boat completely in a few years.”