Automatic enrolment is dawning on many businesses as an urgent issue that can’t be ignored and while it’s a complex and daunting area for business operators, for accountants and bookkeepers it is a great opportunity to add value for clients, improve your own profitability and potentially increase your client base as happy customers refer you to others.
Research by the pension regulator has shown that the vast majority of small and micro businesses plan to use an adviser and/or bookkeeper for advice with automatic enrolment, so there will be no shortage of clients asking for help.
Most will want assistance with payroll processes. There is software available that helps you with the planning stages and this can be used in consultation with a client to decide who will be handling which steps in the process.
Steps such as knowing when the firm needs to be ready, providing a point of contact for regulatory communications, finding out who to enrol, choosing software, record checking, choosing a pension scheme, telling the staff, actually enrolling staff, providing declaration of compliance, maintaining records and fulfilling ongoing responsibilities.
All these steps must be accomplished and going over them with the client offers the opportunity to take some of this work off their plate in return for a fee.
A starting point for most accountants tends to be an analysis of how any existing pension arrangements might qualify under the terms of automatic enrolment and if not, how they can adapt their scheme or find an alternative provider.
REVIEW BENEFITS PACKAGE
This can also be used as an opportunity to suggest a broader analysis of their employee benefits package and how it could be modified/upgraded.
EMPLOYEE AND DATA ASSESSMENT
You could carry out a preliminary assessment of your client’s staff to give them an idea of the task they face, but if the client has many workers on variable pay/hours, where their pay changes each month, this information could quickly become out of date.
Data assessment is a key part of the automatic enrolment process because it ensures employees enrol the right workers at the right times and pay the right amounts into their pensions.
It is suggested that accountants/bookkeepers have their own assessment software that can run these services. Remember, every pay period, the scheme needs to be reassessed to see if any more people should be enrolled, or opted out – and the associated admin has to be handled.
New clients will often be looking for advice on contributions and the impact these will have on their business as a whole, whereas existing clients may well need advice on affordability of contributions – both will need steering on how planning ahead can minimise shock to the company’s finances.
Many businesses do not have the knowledge or capacity to handle employee communications about automatic enrolment. Therefore an accountant or adviser can take over these tasks quite simply. A reasonable quality automatic enrolment system will handle communications automatically, so accountants can offer to take care of statutory information such as opt-out forms, joining forms etc. and also handle any further educational material that employees may need. Clearly, these are two additional areas of added value accountants can talk to clients about offering.
COMPLIANCE AND ONGOING REPORTING
Finally, compliance is a major issue for automatic enrolment and requires good record keeping and reporting, in addition to responsibilities for the pension scheme administrators. An accountant can take over much of this burden, but should be aware that there are third party responsibilities in taking on this work.
However, once the automatic enrolment process is complete for your client, there are many more ongoing duties, including re-enrolment every three years, annual reviews, ongoing financial advice and analysis of how successful their scheme is. There are numerous opportunities here to sell further value-add services.
Each of the above sections offers several opportunities to turn auto-enrolment from an admin-heavy burden to a profitable enterprise for astute advisers and accountants. If you are interested in exploiting this, consider developing a marketing strategy to communicate your services to new and existing clients.
For more information that can help your clients understand the requirements of auto-enrolment, download our comprehensive automatic enrolment guide here.