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Categories:Other,Regulation

Cicutti: Focus on selling must stop

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Almost 20 years ago, shortly after I had joined this newspaper, my then editor asked me to attend an LIA convention in London.

I remember the event as if it were yesterday. About 1,000 or more paying delegates were crammed into a massive auditorium, applauding a range of motivational speakers whose main aim was to make them feel good about selling financial products.

One guy told his audience all about a young man to whom he had sold a huge chunk of life insurance and his client had popped his clogs a short while later.

The moral was obvious - the poor man’s widow was devastated by her loss but she had been left well provided for by her husband’s foresight.

And, to ram the point home, the salesman then brought the widow up on to the stage and gave her a bunch of flowers while the delegates cheered wildly.

I thought the whole approach was not only mawkish and manipulative but also its pitch was aimed not so much at customers as financial advisers.

The message for advisers was along the lines: “Yes, you may wonder sometimes what on earth you are doing delivering a sales spiel 20 times a day. But never forget that, despite what even they might think, you are achieving something good for your clients, so feel positive about yourself, go out there and sell some more.”

This kind of message treats people as infants who understand so little about their needs they need to be cajoled and inveigled into doing something good for them.

That is why I am wary of any organisation whose members are only admitted if they can prove they sold a vast amount of insurance, the Million Dollar Round Table being a classic example.

Last week, Atkinson Bolton Consulting director Simon Gibson explained in Money Marketing why he believes the MDRT is an important part of what makes him a good professional.

Simon intoned: “Is talking to a client about their lifetime financial planning not selling an idea, a dream? Is discussing with a prospect why our services for the management of their money are right for their needs not selling ourselves and/or our business? Even more important, do we not need guidance through change, at work, at home and in the wider world?”

The moral here - and there always appears to be a moral - is that all these worthy aims can only be met by an industry professional if they are allied to a sales process, presumably one involving a financial product.

Now, I am happy to accept Simon is a good professional, as is Bhupinder Anand, another MDRT member whom I have long respected for his financial skills. And I do know the MDRT has a philanthropic arm and a code of ethics.

But regardless of whether it is done with the best intentions or with subtlety and finesse or by appealing to a client’s own self-interest, the notion that what financial advisers really need is more motivational talks on how to sell better misses the point.

It is the very act of “selling” financial products that has, over the years, engendered the levels of mistrust felt by so many consumers about the industry. Moreover, it is selling the wrong kind of product to the wrong type of client that has led to so many of the scandals.

I will undoubtedly be told by some readers the essence of true professionalism is the ability to identify the right product to sell and make sure it meets the needs of the client - and then sell him the idea that he needs the product. What is wrong with that?

I will go back to what I said earlier - the notion that we consumers need to be sold to infantilises us. Rather than treat us as grown-ups capable of making rational decisions on the basis of a good financial plan, the assumption is that without a clever way of knocking down our objections we will not realise what is good for our needs.

I would prefer to sit down with someone who explains the pros and cons of taking a certain step as opposed to another one. I do not want to feel I am being sweet-talked or pressured or moralised into doing something I would rather not do.

Yes, but, I can already hear some of you reply, if we did not try to sell, people like that poor widow 20 years ago would not have two brass pennies to rub together. Surely it must be worth it just to make sure is well provided for?

I will come back to my main point - selling, as regularly practised in the financial services industry, has been responsible over the decades for at least as much misery as it has benefited other individuals. Better not to sell than to do so and earn your client’s enduring mistrust ever after.

Nic Cicutti can be contacted at nic@inspiredmoney.co.uk

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Readers' comments (42)

  • Could you please quote some hard statistical data in support of your assertion that "selling, as regularly practised in the financial services industry, has been responsible over the decades for at least as much misery as it has benefited other individuals".

    This may have been the case as far as large, sales-target-driven institutions are concerned, though the majority of established IFA businesses with loyal client banks, increasingly grown on recommendations, who return again and again as their needs and circumstances change and develop, would probably feel entitled to take issue with such a sweeping and unsubstantiated statement.

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  • Don't you mean " Selling, as regularly practised in the financial services industry, has been responsible over the decades for lots of benefits to society. MIS-selling, on the other hand has been responsible over the decades for much misery" .

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  • What everyone here knows is that people don't go out and decide to buy unless its a need or impulse. If there is a need, usually cost comes into it. To date, I'm yet to meet someone who went out and "purchased" a pension for example.

    This is where the moral sales angle comes in...you need life cover, but you ain't going to spend much are you? Here it starts.

    After many years of mixed results, I'm now happy to say that I give recommendations and expect people to implement them. If there is a protection gap, I will ask their feelings about it (and so far only 2 have said that they could care less) and make a recommendation. If they don't take it, I will terminate the ongoing relationship. This tough love approach (has done wonders) came about because the recommendation is completely bespoke. A fee was paid for the advice anyway, so everything is impartial. If they decide not to cover the protection gap (and no, I don't take commission) we part on good grounds. No selling - just telling that this is best based on their needs and affordability.

    Nic - what do you think?

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  • Whilst I will agree wih you for the majority of products, such as in the pension, investment, mortgage World.

    However, life insurance and in particular Income Protection is not readily bought or requested by clients. Mainly because as a species we are not trained to look at the negatives, but more the positives, hence we plan for things that we want to achieve, but rarely plan for the things in like we don't want to happen.

    We are constantly told by the Government/Press that not enough people have life cover, and very few have Income Protection. Therefore this kind of article is potentially irresponsible.

    I, for one, am guilty of underselling insirance, mainly because of the stigma attached to being a salesman, and concious that I am a 'bad' person if I try to sell.

    Insurance very often needs to be sold - the country needs it to be sold to assist in the Beneifts system. And who rarely complains about having an insurance payout. What is criminal is when it is sold incorrectly e.g. PPI

    But lets please not jump on the politiclaly correct bandwagon, or else nothing will get achieved. I'd rather have a slightly imperfect World where the majority have cover, and accept a few missellings, as distinct from a perfect World where harldy anyone is covered.

    We must stop this type of goody goody righteous journalistic nonsense.

    CHRIST you make me mad

    Please excuse the grammar, spelling etc - written off the cuff - haven't got time to re-read my posts, unlike yourself.

    Publish this if you dare - or is it too aggressive for you?

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  • I am really pleased that I am a good salesman. I say good because I sold myself a very large £500 a month critical illness plan (from Allied Dunbar!) and claimed on it 3 years ago. And they paid out promptly.

    If I hadn't - I dread to think what my life would be like today - I had to sell it to myself.

    The only excuse I have is my starsign as an aries - I am the most immature sign in the zodiac - maybe that's what makes me a good salesman and financial life planner trained in the EVOKE process.

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  • My frustration with the current debate of fees versus commission is the lack of objectivity when it comes to the potential abuses of power, fee generating IFA's have at their disposal.

    We are all aware of the Towry business model, which is a fee based model, but only on the basis that all clients invest in their own funds and no other. Independent financial advice - I don't think so.

    I know of one very vociferous IFA who is forever going to financial seminars round the country telling other advisors about the success of their fee only business model. What he fails to disclose is that their AUM fee is 1.5% and that the majority of their clients funds are held via in-house funds that also charge 1.5% AMC - with a 7% initial front end charge. Add all those fees together and your looking at serious wealth destruction, all under the guise of fee based advice. Are you really trying to tell me that this business model is any better than a commission based model?

    If we're going to have a serious debate about fees versus commission, atleast highlight the many ways 'fee' only advisors are manipulating their own fee structures.

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  • Selling is one thing but protecting clients from themselvies is another very important point to remember. I've been in the industry for 32 years and yes the wild times of the 80's when showing a young man a picture of a new Porshe and saying if you save £500 per month for 10 years, then this dream could be yours was always a bad idea but some companies liked this but of course the business never stuck so really a waste of paper. But I still come across clients with mortgages and young children with bugger all cover and if I didn't mention the what if factor then am I selling a product? So basically I totally disagree with you Nick on this one and with the constant exams at the moment, please give our profession a little more credit.

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  • Strange that Nic Cicutti dosn't ;like the idea of being a salesman

    And yet that is what HE is

    Every week He as a Journaist Sells his skills and articles cos' he certainly dosn't do it for nothing

    He might not like that idea but that is what he is and does.

    And I see nothing wroing with that whatsoever!



    Post RDR we are will all have a "business Proposition" to "sell" ooops I mean give to clients so that they can chosse if thbey want to "Buy" our services and if they "buy" them by definition we will have sold them

    And that is what every business in the country does

    I am not in anywat ashamed of that fact and neither should he

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  • I have always had a distaste for the LIA and MDRT because of the very points Nic makes. However Nic, the reality of life at the coalface is that it is very often our conviction for the financial solutions we offer that galvanises clients into action. It is a fine line between advice and selling and perhaps the truth is that both are needed if some clients are to make a financial decision. The problem of course is too many in our industry are motivated too much by money. That wrong focus is what causes misselling, more than anything else. Selling does not need to be evil, if it is motivated by righteousness.

    Advice is also not necessarily the "Angel of Light" if it is used as a wolf in sheeps clothing. The key is what is the motivation that drives us. Putting our clients first, above ourselves, is what we should all be doing.

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  • Hopefully Nick is just trying to irritate and show his own paymasters that he is capable of attracting readers.
    Presumably he has never had any issue with all of our trade media 's reliance on being paid by providers to sell us their wares using every known ploy of misrepresenation known to man.
    As far as I and now also most of the world know the media have absolutely no problem stooping lower than any limbo dancer to misrepresent life to anyone bored enough to read them.
    Getting peoples attention for long enough to tell your story has always been a difficult and often lonely way of earning a living and only a fool or journo would deny us the opportunity to have our enthusiasm rekindled now and then by lively presentations. I should not think anyone gives them any more credibility than any of Nick's ideas bu they can can brighten up a dull day..

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