Only one in three SME employers (38 per cent) is ready for auto-enrolment, research by Jelf Employee Benefits has shown. In May 2012, 31 per cent had started to prepare, compared to 29.5 per cent in May 2011.

Furthermore, at a recent seminar by the employee benefits company, only 21 per cent of SMEs had heard of the retail distributions review (RDR), despite 42 per cent saying that they currently remunerate their pension consultants or advisers by commission or a joint fee/commission structure.

Jelf Employee Benefits believes that many SMEs have absolutely no idea that the cost of their financial advice and consultancy will now need to be met by them directly, where previously it could have been paid for by the provider via commission to the adviser.

Jelf Employee Benefits head of benefits strategy Steve Herbert said: “Smaller employers are showing very little awareness of the ancillary costs of auto-enrolment. With the RDR changes, they are now going to have to pay upfront fees for adviser costs, as well as potentially increase internal HR headcount and administrative resources to manage the AE project that is coming. Small businesses need to realise this is not going to go away. By taking action today they have the option to spread the inevitable costs over a period of time.”

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