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Nic Cicutti: Brexit will expose the salesmen posing as advisers

Nic Cicutti

Last week, while millions of UK citizens decided whether they wish to remain in or leave the EU, I was taking part in one of the most important pilgrimages in the scootering calendar: the Euro Lambretta rally in Germany.

More than 1000 Lambrettas and their owners met in Geiselwind, Bavaria, to talk about their scooters and swap stories about their journeys, the breakdowns they had suffered and how they had overcome huge hardship to make it to the event.

The rally, as I mentioned, was taking place just as people were voting in the UK. Those in Geilselwind – Germans, Dutch, Belgians, Spanish, Portuguese, Italians and other European nationalities –  all wanted to know how I had voted and what I thought of the referendum.

The honest truth is that as an Italian citizen without dual nationality, I did not have a dog in this fight – not that it stopped me having my own opinion on the matter. What really struck me, though, was the way so many of those I spoke to were surprisingly sympathetic to the Brexit argument.

Most wanted the UK to stay, of course, but understood the British (or is it just the English and Welsh?) perception of an overweening and unelected Brussels bureaucracy that insisted on telling people what to do all the time.

Not only that but one or two even told me they were secretly pleased the UK vote had gone in favour of Leave. It meant bureaucrats would be more wary of making decisions without effective consultation of national electors.

Back in England before the vote, I was intrigued by the poll in Money Marketing, which showed a reasonable 56 per cent of advisers were in favour of remaining in the EU. Not long ago, I remember another survey which showed the Leave camp was supported by something like 60 per cent of advisers.

If the Money Marketing poll accurately represents the views of advisers, it is a small but important sign the majority are not only putting their own interests first but those of their clients too. Because, as we are beginning to find out, this decision is truly momentous, with massive consequences for the finances of millions of families.

How will things break down? Royal London policy director Steve Webb is surely right when he says the triple lock for pensions will remain protected. Is it really conceivable that a Boris Johnson-led Government will kick millions of pensioners in the teeth after they voted in favour of Brexit in the first place?

Annuity rates, on the other hand, are already falling as gilts prices have gone up in the wake of the vote, in turn pushing down yields. The move will affect hundreds of thousands of retirees every year.

One side effect is that faced with lower and lower annuity rates the temptation for many will be to cash in as much of their pensions as possible. Advisers may well be inundated by requests to be involved in so-called reluctant execution-only services by people wanting to take out at least the 25 per cent minimum tax-free lump sum.

Some will go down that route, leaving others to pick up the compensation bill via the Financial Services Compensation Scheme five or 10 years down the line.

One thing I do not believe will happen, contrary to the dreams of Garry Heath’s Libertatem, is a bonfire of regulations by the FCA. A new government is already facing the danger of an end to passporting rights to operate in the rest of the EU.

Even if they had the will, a new government of Brexiteers will not want to risk the possibility of being forced out of financial services operations within the rest of Europe. Weakening of regulation will not happen.

As for mortgages, fixed rates may come down but just who will be eligible to borrow the money and will they want to borrow anyway? Recessions lead to a battening down of hatches and cannibalising each other’s home loan books, as existing borrowers moving to take advantage of cheaper rates is not the way forward for lenders.

The biggest question mark is for advisers themselves. I have suggested that the majority of those polled by Money Marketing showed remarkable maturity in backing the Remain camp.

But they will face very similar issues with regard to Brexit as they did during the financial meltdown eight or nine years ago. Clients will need to have complex issues explained to them, as well as being advised on the best options to choose.

A huge amount of handholding will be required. The majority of advisers will rise to that challenge. But there will be a minority who have focused primarily on sales at the expense of offering genuine advice, coupled with regular monitoring and reviews of their clients’ portfolios.

The result is that some clients will suffer – and they will take out their frustrations on advisers.

The next few months offer the opportunity for all advisers to do what some are already very good at doing. And others will have the chance to learn. This is a tremendous opportunity for the industry to demonstrate how it can add value and protect the finances of millions of consumers.

Wasting the opportunity would be a tragedy: almost as serious as voting to leave the EU in the first place.

Nic Cicutti can be contacted at



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There are 18 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 30th June 2016 at 1:52 pm

    Talking of annuities, Nic, d’you think it likely that once we’re finally out, the UK will repeal the imposition of unisex rates (not to mention those for insurance, not least motor, which has resulted in young female drivers incurring huge increases)?

  2. paolo standerwick 30th June 2016 at 2:28 pm

    Form one Italian (half Italian and half English) to another, those voting for OUT have received so much abuse that it goes to show that the champagne liberals, establishment and the brainwashed public (by media) didn’t like the result. What happened to those lovely, kind tolerant people who were so PC?

    With the growing resentment of the EU across Europe, there are back door deals being considered by Germans, USA and Canada to be put together for the UK. But the EU commissioners are still spouting divorcing from the UK, job losses, economy sinking etc. Maybe people don’t realise when Norway left the EU they also got all the same abuse. However, 1 year on investment was up and employment went down. The EU is a self perpetuating, inward looking, self fulfilling non accountable and non democratic unit. All being funded by tax payers who have no say where there money goes. (Reminds me of other organisations on our doorstep!)

    The people of the UK have voted……………period. Watch this space as there is more to come…………

    • Norway has never been in the EU. They had a couple of referenda which both resulted in “nej”. Did you mean they got abuse after one of those?

  3. Dominic Thomas 30th June 2016 at 2:40 pm

    Johnson led Government… oh the joys of putting anything on paper/online at times like these. Not sure how the title really relates to content, surely most advisers are now properly service, service, service with client relationship at the core, not promising any certainty other than change…

  4. I freely admit I was devastated by the result. I see that the MM poll put over 70% of advisers favouring remain.

    I have just seen a poll on another publication, which asked if clients had been seeking advice since Brexit. Some 80% said no. It would seem that salesmen are still in the majority. I cannot believe that clients haven’t been asking about the ramifications As far as readers of that publication are concerned. I’m no longer authorised, but my ear is already blistered.
    I find it odd how the markets are behaving. Is this a dead cat bounce? (Or even a dead Katz bounce!). To put it in context between 08-May-2015 and 13-June 2016 the All Share dropped by 12.8% as against the All World (incl UK) which dropped by 9.6%. So things are far from rosy, Brexit or not. All Brexit may do is make a poor situation worse.
    I just wonder how many will be laughing this time next year.

  5. The EU should ban old scooters and their owners, the fumes and hot air are horrendous.

  6. A strange article, what you describe is the norm for a financial adviser. We advise our clients about how best to achieve their goals and how to navigate the changing investment landscape. If that includes a decision by the UK government to have a referendum then so be it. This article seems like someone just taking an apportunity to have a dig at advisers.

    Someone could also say “Brexit, an opportunity for journalists to pretend they know something”

  7. Nic & Harry, I have over the years read most of your publications, most I have agreed with, I just have a horrible feeling that father- time is catching up with you both and some of your spouting off, just seems vindictive.

    • Steve.

      Nothing vindictive about facts. Also please bear in mind that the overwhelming proportion of those under 30 were in favour of Remain. That is hardly in line with Father Time catching up.To the contrary, the majority of those over 55 voted for Brexit. It would seem they are the old fogeys, still hankering after the old days.

  8. “…this decision is truly momentous, with massive consequences for the finances of millions of families.”
    So why are we acting on it when the voting was 52-48? Is this a true mandate for such a “truly momentous” action? And if immigration really was the decisive motivation for most of the 52% should we not be battering away in Brussels to get a radical change in this area rather than just shrugging our shoulders and putting in motion the withdrawal procedure?
    Like many of my generation my main reason for virtually unqualified support for the EU was the dreadful human losses incurred in two world wars and the belief that whilst we could not guarantee no repeat,joining together in common cause would make it less likely. This particular inspiration has disappeared at the hands of buffoons like Boris Johnson and Nigel Farage

    • Blair forgive the lateness of my reply (I have been on holiday). I hear what you are saying re immigration and fighting in Brussels. The problem is (or I should say was) that if you’re in the EU you abide by the rules. The rules say – total freedom of movement, end of any discussion. Considering the number of poorer countries in the EU who can’t financially cope with the number of citizens they have are only too glad to see some head off. They will therefore never agree to changing that. The new countries who are coming in (without exception) are also poorer and would not want to join if they didn’t think they were going to end up net contribitutors. They NEED to be net recipients so they will never agree to change the freedom of movement rules once they are in. The fact of the matter is this. The bigger the EU gets the less influence each member state has (by definition each state becomes a smaller percentage of the total number). this will then make it harder and harder to get anything achieved for the betterment of everybody because there will be losers (net contributors) and winners (net recipients) and the losers will become bigger losers by having to spend more of their countries money propping up the winners. It is a political/fiscal ideal that will all end in tears. Just my own humble opinion of course. Have a good weekend my friend

  9. Neil Liversidge 30th June 2016 at 7:10 pm

    So voting ‘Remain’ = maturity? Howsabout voting ‘Leave’ = being possessed of a useful knowledge of relevant history and the ability to learn from experience? The moment I realised the UK had to leave the EU happened about 20 years ago in a bar in Brussels. I had never been totally comfortable with the old EEC and the EC before it became known as the EU but I’d kind of accepted it and was hoping that MEPs would democratise it and fill the ‘democratic deficit’ which they themselves all complained existed. I was in Brussels for a meeting of the Federation of European Motorcyclists which we’d set up back in 1988 in response to heavy-handed EU regulation of motorcycles and motorcycling. The bar – The Bison in the centre of Bruxelles – was heavily frequented by the younger end of European Commission employees, bright – well in their own opinions anyway – twenty-somethings who’d never had any other form of employment. I talked to several and they’d all done the school – university – gap year – internship – paid EU job route with nothing else to cloud their infallible judgment in any way in between. One in particular – a Brit like me – bent my ear about how the British government was such a nuisance always being difficult over the plans the Commission had for the member states etc. etc.

    So here was this kid who’d never had a proper job, never worked in a business that had to make a profit, certainly never turned a profit himself, elected by nobody, who clearly found democratically elected governments an irksome nuisance to be put up with at best.

    THAT was the moment I KNEW the UK had to leave the EU.

    To deal with your point about hand-holding Nic, we lost zero clients in 2008 because we’d taken the time to properly educate them about how markets work plus we turn down those who are temperamentally unsuited to investing. We likewise prepared them for the Brexit vote and had a plan in place which we have now implemented successfully.

    Our clients are as unfazed as am I about Brexit. Ten years from now our economy will be one of the strongest if not the strongest in Europe. If in April 1912 a passenger on the Titanic had had the prescience to foresee the iceberg he’d have got off at Southampton. 2% of voters had the prescience to foresee the iceberg for which the EU is heading. I’m proud to have been part of that 2%. I’ve never woken up happier than I did on 24th June 2016. My children can look forward to a brighter future and where we are going now others will follow. The British people have plenty in common with the peoples of other EU countries; rather more, I suspect, than those people have in common with their own national political leaders, and undoubtably more than they have in common with the likes of Jean-Claude Juncker. Together we can sweep aside the Juncker ilk of Eurocrat and build a new Europe that can achieve what we all want and need from it.

  10. Nic – it all depends what you mean by “weakening of regulation”. Most of the rules needed to prevent bad behaviour have been in place since 1988, or maybe from 1994 when the PIA took over. The problem has been the failure of some firms to observe the rules, thus creating the compensation burden for others, and the failure by the FSA and FCA to supervise adequately. I think the rules could be streamlined and there would be no adverse effect on consumer protection were the regaulators to significantly beef up their supervision

  11. Neil Liversidge 1st July 2016 at 6:32 am

    Above – 2% should of course read ‘52%’ . Just re-read it this morning and realised my ‘5’ key had been stuck! Editor please edit – thank you!

  12. Great comments Neil – I was a leave vote without doubt – as Brussels really was becoming the FCA/FOS of Europe. I can think of another referendum that could be due?

  13. Julian Stevens 1st July 2016 at 2:34 pm

    Talking of better regulatory supervision, a good place to start would be a complete redesign of the GABRIEL returns and for the FCA actually to examine their content. Proportionate and appropriately targeted regulation and all that ~ now where have we heard that before?

  14. Whilst I perfectly concede that there are those on the Brexit side who are perfectly intelligent and are by no means racist, there are so far no figures to show how many on either side were less well informed or had overt prejudices.

    However one thing is for sure Brexiters do have some very unsavoury fellow travellers, which as far as I am aware doesn’t seem to be the case for Remainers. Personally I wouldn’t want to be associated with those sort of people. We have all seen them on the TV and in the media.

  15. Neil Liversidge 8th July 2016 at 2:07 pm

    @Harry Katz: What relevance would a survey to discover “how many on either side were less well informed or had overt prejudices” have? Why would such a survey only be relevant to the referendum? In every election and indeed every some are more informed, some less, and pretty much everyone has some prejudice of some sort. I thought we Brexiteers had been smeared by pretty much every means possible but I congratulate you Harry on devising a new one. For the record, I was a founder member of the local branch of the Anti Nazi League in 1977 aged 14 so the ‘racist’ smear doesn’t work in my case. I’ve also been a Trade Unionist and served as a shop steward, getting fired for my pains by a less than enlightened employer in 1991, so casting all Brexiteers as right-wingers out to destroy workers’ rights doesn’t work either. Back to your preoccupation with figures Harry, reliable figures do show it was largely the working class , God bless it, which voted to free us from the EU. I’m just sad that Tony Benn wasn’t alive to see it. Reliable figures (52% to 48% on the biggest turnout for years) also show that we Brexiteers WON fair and square. Now we want the freedom we’ve earned for this country and we’d be obliged if the shower who purport to govern us would get on with it.

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