There are many things advisers and corporate clients need to consider before switching between providers of auto-enrolment schemes.
According to Glynn Jones, divisional director of group savings and investments at national corporate advisory group LEBC, the first thing to consider might be whether it is worth it.
He comments: "The market for switching is limited. There will be some larger employers switching providers, perhaps for improved terms or better functionality, including auto-enrolment, but generally there is little appetite to switch provider after the employer has gone through the pain of auto-enrolment in the first place."
Look beneath
According to Chris Daems, director of Cervello Financial Planning, there can sometimes be little to differentiate one scheme from another - at least on the surface.
He comments: "All auto-enrolment compliant providers tend to meet a number of minimum standards relating to charges and the default funds that are available to employees.
"This means that switching pensions should be considered carefully, as there can be less which differentiates your typical workforce pension scheme than there are differentiators for individual and personal pensions.
"That said, there are a number of factors where switching might be worth considering", he added, urging advisers to look deeper.
He comments: "These factors include the financial strength of the provider, service levels, fund choice and compatibility with the payroll software an employer uses."
Fund choice
For some employers/employees, they might consider switching because the underlying investment funds are not diverse enough, or not suitable enough.
Natanje Holt, retirement expert for Bravura Solutions, says: "Advisers need to know how the provider is approaching the default funds to ensure good consumer outcomes."
According to Mark Fawcett, chief investment officer for NEST, getting the investment strategy right first time means many people will not need to consider switching simply because their investment funds are not diverse enough.
He explains: "Most auto-enrolled pension savers stay in the fund they are first put in. We do not think that needs to be a bad thing.
"It is because we knew most of our members would stay in the default fund that we have designed it so carefully to meet their needs.
"We began from the starting point that we wanted a default fund which even the savviest member who has the appropriate investment expertise would make as their conscious choice."
Service
Ms Holt adds it is critical to get the service levels right first time, otherwise advisers may advocate switching to a provider with a better track record of service.
She explains: "Advisers need to be able to gauge the level of customer service provided, along with ongoing costs, and ascertain whether the provider is able to scale, and whether the provider will even be there in the long-term."
