You were recently appointed Managing Director of Salvus Master Trust. Can you tell us a little about your reasons for joining?
Salvus’s critical mass and reputation in the industry were both crucial reasons for me joining the firm. Salvus has been in existence since 2009, although HS Administration, our in-house pension administration specialist, has been around for 30 years and has £2.75bn under administration so we are one of the longest established Occupational DC and AE providers. I believe it has an advantage over many other players in the industry as a result of its strong governance structure – we are just about to gain accreditation as one of the few Master Trust Assured Framework products in the market – which puts a strong commitment to governance at the heart of everything we do.
What’s more, we have been running the Occupational DC service for the Pension Protection Fund (PPF) for some time now and recently merged this with Salvus to create a master trust with in excess of £40m of assets. Our workplace pension is competitively priced and offers a Blackrock default fund along with a choice of some 20 + additional investment choices, making us ideal for employers, large and small, who are looking for a workplace pension with real investment choice.
What are your plans for the company over the coming year?
We will be working closely with a number of intermediaries, including advisers, accountants and employee benefits consultants to ensure that we are meeting both their needs and those of their clients, many of whom will be enrolling their employees into a workplace pension scheme for the first time. It is therefore crucial that these people feel they are well-supported and confident as they make this transition.
As an established master trust, consolidation is also high on our agenda. There are about 70 master trusts on the market and some of them are unlikely to get the critical mass or the funding needed to survive the next few years, particularly if they are using a basis point model. It is relatively early days yet, but we are looking at a couple of potential deals at the moment.
Also with the demise of member borne commission in workplace pensions we see a significant secondary market emerging for those advisers and employers seeking a better deal for their existing members. We remain committed to supporting both in transferring from outdated Group Personal Pensions (GPPs) to our highly governed workplace pension.
2016 is already proving to be a totemic year for auto enrolment. What do you see as the major opportunities for advisers and other intermediaries in this space?
One real area of concern for many in the sector is the fact that the implementation of the auto enrolment reforms was not properly thought through by the government. It’s placed a huge burden on the shoulders of employers who are feeling very unprepared for what lies ahead and unsure if they are complying with government regulations or not. Similarly, larger firms, who might have pension schemes in place already are far from immune from this uncertainty, as their current provider may not be set up to deal with auto enrolment. In a number of cases, their payroll systems might be incompatible with auto enrolment requirements, meaning many employers could face an administrative and compliance nightmare. Advisers who are ready and willing to lessen the burden on these employers and guide them through the process will be well-placed to benefit from a strong auto enrolment offer.
Moreover, many advisers will have seen their revenue squeezed with the fallout from the Retail Distribution Review. Offering auto enrolment services could potentially offer advisers a chance to grow a new area of revenue. Even if auto enrolment as a proposition becomes low margin, advisers we speak to find that clients who come to them for auto enrolment services are likely to end up using them for other work, including forms of protection such as death in service and income replacement. So it can present a good shop window for the array of other services they can offer clients.
Tell us a little about your life outside of work, do you have any hobbies?
Life outside of work? What is that? Auto enrolment has been an all-consuming subject for the last 3 years. But seriously, I enjoy the countryside in rural Buckinghamshire and have started my training for this year’s goal of completing the West Highland Way (a long distance walking trail).
What is the one column or website that you read every day?
I blog on Linkedin so am on there most days. Besides that I spend a lot of time on Google Maps working out where I have to be the next day! I travel a lot, speaking at industry events and talking to accountants and advisers on how to “Tame” auto enrolment.
What is your biggest pet peeve, or makes you angry?
It’s the old adage of the left hand not knowing what the right hand is doing – the left hand being DWP and the right being the Treasury. Pensions legislation is so intertwined with taxation but the two never seem to be aligned.
What would you do if you were Prime Minister for a day?
Hmm just one day?! Bring in flat rate pensions tax relief at 30%.
What would you do if you received a windfall of £1000?
I would put it in my pension fund and with the 30% flat rate tax relief I’d introduced as Prime Minister, see it increase to £1428!