For two days this week the Employee Benefits gang have decamped to the luxurious surroundings of the Four Seasons Hotel in Hampshire – to a lifestyle to which we would love to become accustomed.
We haven’t come alone. We have brought with us several dozen leading benefits and HR managers who look after workplace pensions plus experts from seven leading suppliers. So we are a happy, but large party discussing all things pensions (it’s fun, I promise!) at our annual Pensions and Workplace Savings Summit
So what is the hot topic of the day?
For my money – it is consultancy charging. That is, the money employers pay their consultants or advisers via scheme charges (as opposed to fees) over and above the annual management charge.
The question is: are the consultancy charges providing good value to employers and their employees (who often land up footing the bill)?
While many employers would say consultants do provide value, we know that there are also plenty of cases where they do not.
So the Department of Work and Pensions (DWP) will be looking into consultancy charging to get a measure of the issue, while The Pensions Institute at Cass Business School, in a separate exercise, is about to conduct research into this. Both said as much in our conference sessions this morning.
The results will be of huge benefit to employers, their staff and, in my opinion, the consultants themselves.
Consultants which do provide good value do not want their reputations tarnished by those who don’t. Understanding what ‘good value’ looks like will be a great start.
With all the work done by DWP and others on annual management charges, we now have an idea of what a fair rate is (somewhere between 0.5-0.7%).
The next investigation on consultancy charges will be more complex, but just as necessary.
What do you think?
Debi O’Donovan
Twitter: @DebiODonovan