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Cicutti: Advice or sales?- make the choice

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It was to be expected really. No sooner had I written about the dangers of selling financial products than a wave of comments followed from IFAs who not only believe it is a vital part of the advice process but also feel they have failed their clients because they did not sell hard enough.

In addition to the 40 or so comments posted on the Money Marketing website, another 30 or so found their way into my email inbox last week.

Predictably, many of the responses focused on variants of stories that either involved grateful clients thanking their lucky stars that they had listened to their advisers’ sales patter and took out shedloads of insurance, or they didn’t and suffered the consequences.

Somehow, I mysteriously failed to spot any stories of the nurse or teacher who was eternally grateful to their adviser for flogging them a personal pension and transferring them out of their occupational scheme.

Or the millions of homebuyers who listened to the sales spiel of their advisers and took out a with-profits endowment to help pay off their mortgage - which they then surrendered for less than the contributions they had paid in over the preceding years. Alternatively, if they carried on paying into them these products stand no chance of paying off more than a fraction of the homeloans they were intended to settle in full.

Then there were tens of thousands, mostly elderly, investors who were lured into risky split-cap investment trusts and lost hundreds of millions of pounds. Yet no one has proudly stood up to tell us how glad they were to have taken part in that particular selling exercise.

Funny that - and how naive of me to dare to suggest that treating your clients like mugs with so little understanding of financial issues that they need to be treated as if they were idiots is not always a great move.

OK, so this is clearly an issue that lots of readers feel strongly about, hardly surprising really, given that for so many of them the entire experience of working financial services over decades has been based on a proposition that sees the selling process as central to their relationship with clients.

I remember once profiling an IFA for this paper a long time ago and he told me how he had set up what turned out to be a highly successful business in Belfast, his home city.

Basically, it was all down to prospecting, knocking on thousands of doors over a period of years, asking if he could speak to the man or woman “in the house” and then trying to sell him a financial product. If the punter said he was busy right then, the IFA would nod understandingly and then arrange a more suitable time to call round.

In time, this adviser built up a large number of customers, to the point where he no longer felt the need to knock on doors. People started to come to him, either the ones whom he had originally sold to or others recommended to him by his initial clients.

Realistically, there is not a cat’s chance in hell that someone like that, who dragged himself up the hardest way imaginable for any adviser, is ever going to say: “Selling is a terrible way for any IFA to build a business.” And anyone who in recent years went through even a fraction of that man’s experience in financial services will feel that selling is an essential part of how to deal with a client.

So I fully accept that it is incredibly hard for anyone to let go of that entire ethos and replace it with one in which advice is given and discussed in a mature way with the client - including areas where he or she may be underprepared in terms of the protection they need or investments they may need to make in respect of their future retirement needs.

But unless advisers start moving in that direction some time soon, they will never be in a position to realistically implement key aspects of the RDR.

After 2012, the onus will be on genuine IFAs to show their clients that they are not simply after making money by flogging products. That, after all, is part of the desperately needed process of re-establishing credibility with potential clients. So for everyone who continues to defend past practices even when, in many cases, they failed to meet the needs of millions of people in the UK, you really are missing the point here.

And another thing - to the nice senior Million Dollar Round Table person who emailed me to stress the standards of excellence his organisation holds dear to its heart - and then tells me the organisation’s “production requirement” is a starting point to achieve these standards, I have to ask: why is it necessary to do so by means of proving how well you sell? Why are you defining what is “best in the industry” as an ability to sell more than everyone else?

Over the years, I have met many successful salespeople in the industry. I have also come across some fantastic advisers and financial planners. Occasionally, the two will overlap but overall my experience teaches me that most people are either in one camp or the other. Time to make your mind up.

Nic Cicutti can be contacted at

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Readers' comments (34)

  • Nic, rather than make a column war out of this, let me provide a degree of balance here.

    No decent IFA seeks to take advantage of clients whether existing or potential.

    Nonetheless, one of the tools at our disposal when looking for business is to prospect.

    As an example, I regularly trawl my client files looking for eareas where they have a lack which I can resolve. This could be a self-employed fellow with no income protection or a family with no family income benefit or other life cover. I even have clients who foolishly chose not to take life cover to protect their mortgage.

    By contacting them I am providing a worthwhile service which also benefits me if they agree to go ahread with a recommendation.

    In this regard I am selling. I am selling them the potential consequences of their inaction. I am selling them the knowledge that a solution exists and is affordable. I am selling them my services in solving the problem for them.

    None of this is negative.

    I have fourteen clients whose critical illness plans have paid out. Some of these I persuaded to take CI when they might otherwise have taken life cover only. None of these clients regret my approach.

    You need to accept that a blanket dismissal of selling is as foolish as direct sales force pushing whole of life as savings plans.

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  • Nic is just looking for ways to keep his column going after RDR.
    He will fill it full of vitriol over advisers who only give advice, advisers who give advice and sell products and those who only sell products. He will stir up trouble between them in order to keep getting paid for his S*** Stirring.I would rather sell myself than earn a living the way nic earns his.
    By the way I believe ALL journalists are unethical. ALL of them are involved in phone hacking and other dirty deeds. There is not an ethical one anywhere to be found.

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  • Must be mad for responding to this Screws of the World nonsense but....
    My time is fairly equally spread between many aspects of financial advice and selling. I dont think that anything we do is done without some element of selling and given the general apathy that we all have over money until we have a problem then sales skills are indispensible.
    Whenever we communicate with our clients we sell whatever message we have to the best of our ability.
    Our business is very succesful and this is a consequence of the way we use our sales skills to deliver our advice and we are quite proud of this facet of our success.
    Most of us arae awre that the trade media is very lacking in sales skills of any kind and is withering on the vine because of its almost total reliance on provider press releases or pie in the sky surveys.

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  • I actually like this article. It is sufficiently spikey to arouse the passions. I can't say I disagree with him either. RDR can't come quick enough in my opinion, the good ones will survive and the rest will fall by the wayside. That is what RDR was suppose to achieve and it will. The industry will be FAR better in 2013, you will see.

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  • Totally agree Nic. Since the 1980s I've been trying to find an "ethical" company that knows the difference between sales and advice. It's one of the first questions I ask. Sadly they're still around, their sales targets (especially Banks) forcing advisers to choose between having a job and maintaining their ethical standards. I have a friend who informed me that the "Adviser" selling her endowment policy said people who had taken them out were "laughing" at the payback. Cowboys. It's disgusting and it won't end until targets and bonus payments stop.

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  • Maybe some of those who have not purchased life insurance to cover their mortgage
    - have no dependents or
    - have a meaningful amount of cover from a group scheme

    Not everyone who hasn't got mortgage protection is foolish - many are wise enough not to fall into the trap of buying something they don't need.

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  • Everybody sells something -even you Nic. You sold yourself to the editor to get the column in the first place. Ever had a girfriend? Bet you didn't advise her to go out with you. You persuaded, cajoled (personally I usually just grovelled) but in any event you sold the idea that going out with you might not be that bad.

    IFA's, irrespective of whether they are mega qualified investment advisers or just plain vanilla, ALL sell something whether it's their skills, their ongoing service levels etc. The sooner the FSA and the various consumer groups realise that "selling" isn't a dirty word the better!

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  • Post RDR Product becomes less important

    But the "service" we provide IS going to be important

    So an IFA sets up what is without doubt the best service proposition out there and waits for clients to come knocking on hids door

    He waits and waits and no one does

    Why? Well That Service HAS to Be SOLD so he starts selling his sproposition and his buisness takes off !!

    To compare the industry we are in right now with selling pensions or endowments to nurses or school teachers is to turn the clock back 20 years

    It is beneath you to do so Nic

    So get Real NIC After all You ARE a salesman too and for goodness ake be proud of it because I am

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  • As an IFA of 14 years and happy to work on a fee or commission basis I have to say Nic is absolutely right. If you give good advice then there is no need to sell. Selling implies forcing something on someone they don't need. If you advise of the need then the client will proceed, and if they don't then at least they understand the consequences, which possibly they didn't previously.
    I'm fed up woth hearing the anochronisms of ageing IFA dinosaurs wittering on about the need to sell. This used to be a sales industry, but those days are over. The advantage of giving advice for a fee is that you get paid regardless of whether your advice is followed or not, and that is a good thing.

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  • You are "selling" whether it is a product or a service. IFAs sell both a service to their customers and products for product providers. Customers pay for the service they receive, and product providers should pay for their products being sold by IFAs. That marketing cost will remain even if IFAs disappear.

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