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Advisers unlikely to win big RDR concessions

Whenever you write a column, there will be weeks when one issue stands out above all others. At other times, there seem to be lots of things to talk about and it is not possible to weave them all together seamlessly.

Sadly, I suspect this is one of the latter type of weeks because what I want to say encompasses Aifa’s annual dinner, the election of my occasional sparring partner and Personal Finance Solutions managing director Neil Liversidge to a seat on Aifa council and the predictable online outrage at the FSA’s claim that it “had listened” to the industry over its RDR proposals.

Finally, I want to touch on some aspects of the response to Which?’s entry into the mortgage advice market, along with the suggestion that it does not rule out the possibility of becoming involved in other areas of financial advice.

First, the annual dinner, for which many thanks to my gracious hosts. The conversations I had were both interesting and useful, more about which another time.

The after-dinner speeches were a mixed bag. Anthony Hilton, long-time columnist at the Evening Standard, was amusing and erudite although I did wonder what had happened to the days when Aifa could call on the chairman or chief executive of the FSA to come and address them.

Sadly, Aifa chairman John Gummer, now Lord Deben of Winston, was much less exciting. Everywhere around me, people switched off after a mere five minutes of his “not more regulation but better regulation” speech.

If this was a job renewal application for the benefit of Stephen Gay, who had earlier stood and given his audience a bow, I suspect that the audition did not go well. Still, no one seems to have minded earlier versions of the same mantra, so what do I know?

Neil Liversidge was probably there too. If not, I am sure he will be in future. If so, he will probably be grateful that dinners like that are not occasions for people to start questioning what you have achieved in the preceding 12 months because if people try to hold him to his “manifesto commitments”, I fear they will be will be disappointed.

According to Money Marketing, Neil wants to “win compromises from the FSA over the RDR and look to introduce a rule change to bring about the continuation of authorisation for advisers changing firms”.

Predictably, his vow drew praise from the usual suspects gracing Money Marketing’s website. The fact that he is unlikely to achieve any of these aims appeared to escape them. They will draw comfort from the fact that one of their own is now on Aifa council, even if he manages to deliver little or nothing in terms of their aspirations.

Which brings me to the indignation over the FSA’s claims to have “listened” over the RDR. Speaking at a conference, FSA head of investment policy Peter Smith said: “The RDR has emerged from what is now four and a half years of work involving more formal and informal consultation with industry stakeholders than anything else the FSA has ever done.”

Within hours of that story going live, more than 40 comments appeared, many of them involving precisely the same people who had earlier been praising Liversidge. The critics’ chief accusation was that the FSA may have listened but took no notice of their views.

I suspect they are right – at least in the sense that the opinions of those who contributed to the discussion under the article were largely ignored. But then again, one has to ask why on earth the regulator would want to take them into account anyway. If your views are ridiculous, do not expect anyone, let alone the regulator, to take any notice.

Which takes me to Which? and its decision to enter the advice market. Money Marketing editor Paul McMillan takes a dim view of this, arguing that he “cannot see how promoting its service through comments alluding to the fact that the rest of the industry cannot be trusted does advisers any favours”.

A fair point, weakened by the fact that IFAs have prospered since time immemorial by telling anyone who will listen that they are better than bancassurers, life company salespeople and tied agents, who cannot be trusted.

Where Paul is right is in asking how Which? aims to offer a better service than existing high-quality advice firms. My suspicion is that it will deliver good, efficient and trustworthy independent advice but it will not be head and shoulders above the best IFA competition.

Still, the good thing about Which? is that in future we will all know what to aspire to – at least in theory. If you are better than them, big pats on the back all round. And if you get caned by the regulator, get your revenge by dobbing them in.

Nic Cicutti can be contacted at


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There are 29 comments at the moment, we would love to hear your opinion too.

  1. Neil F Liversidge 25th November 2010 at 11:09 am

    Nic, in the words of Barry Goldwater, “You don’t have to be disagreable to disagree”. I don’t regard you as even an occasional sparring partner and I always read your column with interest, not to mention amusement. As regards my manifesto pledges, if they don’t come off it won’t be for want of trying, so how’s about we just wait and see?

  2. What an erudite, balanced and downright useful piece. Well done.

  3. Alan Lakey - usual suspect 25th November 2010 at 11:40 am

    Nic, ‘usual suspects’ are generally those advisers who can be bothered to air their opinions on matters of importance…and also on your column, of course.

    We have a trade body which has been somnolent and wakes occasionally to yawn some vacuous threat.

    We have a regulator that knows best and seeks to implement policies that unwittingly or otherwise will create mass disruption, millions of orphan clients (that ABI members will gladly gobble up) and the mere matter of £1.7bn cost.

    We have a resident columnist who takes pleasure in denigrating the bulk of his readers and occasionally threatening them with violent retribution.

    Why wouldn’t we comment?

  4. If Neil can’t inject some much needed vim and vigour into AIFA, then nobody else is likely to be able to do so.

    That having said, I remain of the view that lobbying the FSA doesn’t work. What the FSA doesn’t wish to give any ground it, it simply doesn’t have to unless directed to in a court of law which is, of course, where the likes of Regfulatory Legal come into the frame. The FSA’s programmes of consultation are a hollow sham. It invites comment, it receives comment, but then doesn’t publish said comment, claiming merely to have “taken it on board”. Taken what on board? Just the bits which happen to accord with its predetermined agenda.

    Restoration of the protection afforded in Law to all other citizens by the 15 year longstop? No ground given.

    An increase in the estimated costs of implementing the RDR from £600m to between £1.4 and £1.7Bn? Oh, go away and stop whingeing.

    Regulation by hindsight. Yeah, so?

    Are you of the opinion Nic that we should just resign oursleves to this kind of abuse and take it lying down? Well, we won’t.

  5. @Neil Liversidge: You’re right, we will see how successful you are in due course. I also defer to your own description of our (non)-relationship. In which case, I must have imagined the letter you wrote responding to my views only in September this year, or the fact that you contacted me directly last year in response to an earlier reference to you in one of my columns. Most people would accept that as deserving of a jocular reference to “occasional sparring partner”. Not you, clearly.

    @Alan Lakey: one of the problems of the internet (for you, that is), is that it’s very easy for people to go back and read what was said, when, where and in what context. Which is why your more risible allegations about what I did or did not write barely two weeks ago can easily be checked by anyone who really wants to. I’m happy for people to do that and will just leave things at that. But you carry on if you really want to….

  6. Neil F Liversidge 25th November 2010 at 3:32 pm


  7. Neil F Liversidge 25th November 2010 at 3:43 pm

    If you google enough Nic you’ll find comments where I am happy to defend you. If I really wanted to wind you up, I’d just tell you to get a proper bike and quit riding a hair drier! 😛

  8. Its that old chip on your shoulder again Nic !!

    Were you bullied at school ??

  9. Here we go again, nic trying his hardest to pick a fight so he will get lots of comments which will make people think what he writes is worth reading.

  10. @Neil: Not touchy at all, just someone with a reasonably good memory, for whom the phrase “occasional sparring partner” was meant in vagie toines of approval.

    As for scooters = hairdryers, ah yes, that’s a wonderful golden oldie, almost as old as the suggestion that riding a big motorbike is all about a desperate need to have something throbbing between your legs. In the absence of anything else to take its place. 😉

    @ Simon Kershaw: thanks for your generous and totally sincere praise.

  11. The IFA population appear to be frightened of their own shadows. If they really believe they are giving the best advice with transparent charging structures being fully explained, then they have no problem. My guess is the Cowboys are making a noise because they can’t sleep at night because they have to go back to school.

  12. You are very welcome Nic. It is time that your position as the pre-eminent champion of consumer detriment be recognised and applauded.

  13. oopI see Mr. Anonymous is sharpening his/her tongue again. Thye have been reading too many comics about cowboys and indians.

  14. I get the impression from this article that if you disagree with Mr Cicutti then your views are considered “ridiculous”.

  15. I have chickens, well poultry actually, I don’t count them.

  16. Nic as one of the 40 whose views you consider ridiculous what can I say in my defense ? Nothing apparently – as you have already concluded that it is ok not to listen to what you consider to be ridiculous views.

    I would point out that last year I wrote to the House Treasury Select Committee and John McFall, apparently not seeing my views as ridiculous, kindly asked the FSA my question about the logic behind “one size fits all Q level 4 exams”. I can not speak for Mr McFall but I think that he would agree that although the FSA listened they did not answer the question.
    to my way of thinking this is the same as not listening.

    As both my question and their non answer are a matter of public record you should easily be able to find the full text.

    I appreciate that it is part of your role to be controversial and to bait the usual suspects but even so where some many people stand to suffer I do think that your comments could be a little more measured.

    For the avoidance of doubt I do not accept the the FSA have the right to force me to take any further exams and I will not under any circumstances be taking them. Having passed exams at a far higher level I have little doubt that I could pass if I wanted to but I will not be bullied and nor should anyone else.

  17. Anonymous | 25 Nov 2010 4:26 pm

    The IFA population appear to be frightened of their own shadows. If they really believe they are giving the best advice with transparent charging structures being fully explained, then they have no problem. My guess is the Cowboys are making a noise because they can’t sleep at night because they have to go back to school.


    You underline the problem absolutely perfectly in your summary with your words ‘My guess is’

    our whole point is that the whole lot is a ‘guess’

    A real fact is that the financial advice must fall within the budget of the consumer?

    What is the average spending capablility of the public regarding financial advice?

    That would have been a nice start.

    Then how much can be expected for that amount of money?

    Afterall there is a limit in this country to what your pound can buy, even if it was made in China.

    Possibly another one is what is a good adviser and what made them good, is there are common demoninator?

    Are there less advanced qualified advisers caught up in misselling as a percentage than there are nationwide?

    Why did medicine, which deals with life and death, not go down the same educational route as the FSA decided to go? That a pretty big and sensible question to ask.

    Just a few basic questions amongst many that anyone with more than one brain cell may have considered asking before changing the face of retail financial services forever and costing over a billion in the process.

    I think you need to look up the modern definition of a cowboy again.

    The cobbled together RDR and those that are introducing it, plus the few who support it are more likely to fall in to that bracket as they like inventing things in their heads rather than deal with the reality, they cant get sacked for things they invented which cannot be checked, facts can be evaluated.

  18. I wonder if there is some kind of award for which you could be nominated. Excellence in a particular field should be rewarded.

    It does my heart good to read your high quality work.

  19. Loonies?

    All those MPs?

    All the members of the TSC?

    All those IFAs and their clients?

    Is this professional journalism?

  20. Neil F Liversidge 26th November 2010 at 12:08 pm

    There is justice in the call for a compromise on qualifications and where there is justice there is always a possibility – a probability even – that right will prevail. All joking apart therefore Nic, I do not accept that there is no chance of a compromise. I would even go so far as to say that it is the opponents of compromise who are the ones out of touch with political reality, because all real politics is about compromise and catastrophes usually result from the failure of individuals and institutions to accept that fact. Only dictators operate according to absolutes. There are those who say that the public would not understand why some IFAs were to be given a pass on qualifications. I do not believe that is so. I passed my motorcycle test 30 years ago when it was far less rigorous than it is now, likewise my car test in 1984, and so did millions of others. Re-testing however is something that the law only requires of naughty boys who commit serious offences, so why not apply this principle to financial services? Why not grandfather those with unblemished records and long service – 20 or 30 years maybe – subject perhaps to an upper limit as to the length of time they can continue to practice, and/ or only require re-testing should a serious problem occur subsequently? I have no vested interest in this as I have my diploma, and fees-wise we have been RDR compliant since 2004 before RDR was even thought of, but I can absolutely see the point of those who are now being placed under new exam pressures. I wouldn’t fancy being forced to re-take my test to keep riding my Harley, Nic, and I suspect the same goes for you with your Lambretta. I don’t suppose Hector Sants would fancy being unreasonably deprived of his licence to drive his Jag or Merc or whatever other car our fees provide for him either. Justice and common sense equal compromise.

  21. I say if you are doing your job properly you must be adequately qualified. What are the IFA’s afraid of ?. Surely they owe it to their clients to be current and professionally qualified in order to be able to give best advice.

  22. After the thrill of last week’s column and the ‘Fancy a fight?’ comments that followed, I must confess to being disappointed this time around.

    We’ve discovered that Cicutti putters around the city on a Lambretta like some sort of balding Jamie Oliver, while the once bolshy Kershaw has retreated to metaphorically prodding his tormentor with a stick.

    Any chance of Lakey wading in instead? He sounds HANDY…

  23. Neil @ 12.08pm, excellent post, made all the better by the fact that you ride a Harley, as do I.

  24. Well said Neil.

    I often find your articles thought provoking and interesting. But consider please:

    Is it right for someone in their 60’s who has 35 years experience in the industry to be judged on exams?

    Is it right that 20% to 30% of advisers may leave the industry as a result of the RDR?

    Is it right that the industry could be saddled with costs of nearly 2 billion, to take a sledge hammer to crack a nut?

    Is it right that most of my clients, who live in a rural area and are on low wages, will be unable to afford advice under the new process?

    Finally under RDR if there are 20% to 30% less advisers? How the hell are the remainder going to be able to afford the fees? For instance FSCCS levy?

  25. @ Neil: you’re right, I wouldn’t fancy being forced to take a new exam to ride my Lammie. But if I had to I wouldn’t whinge about it or look for grandfathering clauses, I’d prep up for it, pay my money if need be and just do it.

    As it happens, I also think that the new test is far better than the old one I took 30 years ago. Only luck, plus the fact that there was far less traffic on the road and what there was was far slower than today saved my life and that of scores of other kids like me who rode motorbikes at the time. Even so, I crashed my scooter at 50mph within days of buying it, fracturing my pelvis. Today’s CBT would have gone some way towards preventing that.

    By contrast, the new test plays a small, but with other traffic measures, cumulative role in delivering better road safety. As an uncle whose teenage nephew passed his full motorcycle test and has been riding a Lambretta for three years now and whose partner passed her full bike test in 2008, I can also tell you that I’d much rather see my loved ones taking a test that demands far more of them and their time than mine ever did. It’s a shame IFAs don’t feel the same way about their qualifications. But hey, we’re only talking about clients aren’t we…?

    As for your other suggestions about who should and should not be exempt from the requirement to obtain extra qualifications, you forgot to exclude people who were born on Mondays, whose middle name is Xylophone and who own a minimum of three llamas.

    @Simon Kershaw: Honestly, you really ought to stop, for your own good. Even some of your mates are telling me they’re embarassed by you.

    @John Blackmore: I hope your leaving do on 31 December 2012, or sooner if you really can’t stomach staying in the industry a second longer, will be a good one….

  26. @ Neil L

    Neil, the exam qualifications and the cut off date have been on the cards for years now. Me and a lot of other people starting sitting exams in prep for this a while ago, and we either have the exams passed or are pretty close.

    The heads in the sand mob have, to be honest, only themselves to blame. We all knew this was coming. Anyway, if the lads and girls with 20-30 years experience are so great, then with a bit of exam prep they should be able to knock the exams out without an issue

    Funny that the people I know in the profession who I rate very highly have a couple of things in common: great real world experience with a lot of proper qualifications backing that up. One without the other does not work, at least in my opinion.

    I agree that Nic has to earn his crust somehow, and him baiting the naysayers can be amusing for us all.

  27. journalist blinded with prejudice 28th November 2010 at 6:56 pm

    Nic there are none so blind as those that don’t want to see and you are a good example of journalist blinded with prejudice!

    The one thing in your favour is that you’re the journalistic equivalent of: “I’m a journalist get me out of here” where your IFA phobia keeps you in print for the sheer vitriol you are capable of generating amongst those who read your comments.

  28. Whilst Neil might not achieve any of the aims of his manifesto, it is about time someone put their head above the parapet and tried to stop some of the ridiculous musings of the FSA becoming enshrined in law.

    With regards to Which magazine, I would only remind you of the time when Which magazine was extolling the virtues of the endowment plans as a means of repaying a mortgage.

    I remember an individual who was a client at the time producing the magazine showing me that Friends Provident was top of the league. Yes I trotted off got an agency with Friends Provident and gave the client what he wanted. He had a shortfall as I recall of some 30%. Had he taken the endowment that I was wanting to arrange for him he would have had a surplus. Yes that company was a little unknown but unquote my manager at the time, their is the correct premium to do the job and if everyone else wants to do it at a lesser premium then let them.

  29. Re Nic, I presume by your Lammie, you mean Lambretta, but if there was another test to ride your Lambretta at least you know it is a test designed to prove you are competent at riding your Lambretta.

    You are assuming that the study requirements here achieve that end result.

    This is where we disagree.

    In generic study material, academic is for academic status, vocational type training is for competence and to keep up to date.

    Some are saying it cant hurt do it anyhow, others who are a little wiser know what the outcome will be and would rather get it right first time with a little more thought and preparation.

    Plus using academic material reduces academic worth as those who wish to stand out from the crowd with academic achievement will find it more difficult.

    The bottom line is academic achievement is not proof of ability to be high quality or competent at delivering advice, only some people in this industry have twisted the truth somewhat.

    Why cant we just take our time and do something properly for once?

    Find out what is good, if it is possible to replicate and the best way which is designed to deliver that, common sense surely?

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