Advisers need to be interrogating costs for auto-enrolment, the chief investment officer for NEST has said.
"It is really important to understand the charging structure", Mr Fawcett said. With all the various charges, such as the employer charge, employee charge, annual management charge and potentially additional fees, advisers should "understand all the charges", he told FTAdviser.
He pointed to a report produced by Defaqto and commissioned by NEST, which found it was difficult to compare charging structures across schemes.
Mr Fawcett said it was therefore clear that charging structures "needed to be transparent and advisers need to be able to see what their clients are paying for".
For example, NEST has a 30 basis points annual management charge and a contribution charge. Over the long term, he said, which equates to an approximate 50 basis points charge on default funds. This is less than the industry standard 75 basis point charging cap on default funds.
