9 critical months for advisers targeting SME auto enrolment
The remainder of 2015 is a critical time for SME employers and for financial advisers looking to deliver an auto enrolment solution into that market, says Chris Daems, principal of Cervello Financial Planning and co-creator of AE in a Box
In April 2015 we’ll be nine months away from the first huge influx of SME employers needing to comply with auto enrolment.
The pace of auto enrolment is due to accelerate at unprecedented speeds at the start of next year and whilst January 2016 may seem a long time away in many businesses we’ve found that one simple thing regardless of the size and type of the business needing to comply remains true… the earlier a business starts to get ready for auto enrolment, the smoother the journey to the staging date and compliance with the auto enrolment rules.
For larger businesses the journey was typically a 12-18 month one. For smaller employers the timescale we recommend is they start to prepare nine months prior to their staging date.
If an employer has less time than this they can still comply but, in our experience, employers who don’t leave themselves enough time to truly understand how the new rules impact their business can find themselves in a situation where they struggle to get everything done by their staging date, or if they do, they find themselves in a position where they need to fully understand the rules, put a project plan in place and make decisions under a quickly approaching deadline.
However, having sufficient time allows employers (and the professionals who work with them) to make informed decisions without rush, decide on the best approach to comply with auto enrolment (which typically includes which software solutions to use and which pension will do the job) and typically have more compliant processes in order to ensure they meet the new rules.
Broadly speaking they have three options in order to ensure they comply: They can consult with a professional; they can do everything themselves; or they can use a system designed to give them the tasks they need to complete to the job. A system like AE in a Box.
This year will without a doubt be a year of change. The impending election, a huge raft of legislative change which impacts our personal financial affairs and on top of that the tasks we need to complete in running and managing our businesses on a day-to-day basis.
However, don’t forget that if you’re one of the professionals helping out some of the avalanche of employers who need to comply in 2016, early preparation in our experience has been a key component.
So, I have two humble suggestions – and I appreciate that there’s plenty else going on in the coming couple of months:
1. If you’re an employer with an upcoming staging date, start planning to comply with auto enrolment today.
2. If you’re a professional aiming to help employers with auto enrolment, do the same.
Visit AE in a Box website