Nic Cicutti: Advisers are not buying into Garry Heath’s vision

Nic Cicutti

For those who subscribe to streaming video services, one of the undeniable viewing hits of the past year has been Amazon Prime series The Man in the High Castle.

Based on the book by science fiction author Philip K Dick, the series is set in the year 1962. Nazi Germany and Imperial Japan have won World War II and the US has been carved up into two puppet states, each ruled by respective – and increasingly antagonistic – former Axis powers.

The central premise of both Philip K Dick’s book and the TV series is not just an attempt at counterfactual history. What if, rather than just one version of “reality” there were several, each influencing the other?

As I watched the final episode of the TV series last week, I found myself wondering: what if, instead of just one reality affecting advisers and their trade associations, there were two entirely separate realities?

My reason for asking was Garry Heath’s withering blast against me a fortnight ago for a rather mild jibe at his trade body, Libertatem, over two of its policies, namely “a call from him for a return to commission payments for advisers” and the “more recent proposal for an old-school Fimbra-style regulator for advisers”.

That did not go down well with Garry: “I am getting heartily sick of you attempting to misrepresent my views and attributing ambitions to Libertatem that it does not have. Why destroy a good storyline with the facts, eh Nic?”

Let’s examine the two policies I ascribed to Libertatem that he feels I have somehow misquoted.

First up, commission. Here, if I misunderstood him, so has every other trade paper, magazine and website covering the adviser market.

For example, as a Money Marketing profile of Garry in July read: “Heath believes simplified advice is not the answer to the advice gap due to unresolved issues over liabilities.

“Instead, he proposes a return to some form of commission, which he says would allow those who cannot afford to pay for advice upfront to spread the cost of fees.

“He says: ‘The regulator’s argument against commission was not that it existed but that there were differential rates which determined which adviser got what business. We could come up with a single price system for a group of advisers.

“The fee could be added to the cost of the product and paid off by the customer over the long term. It could be collected by the provider or by a trade association as a direct debit’.”

Another Money Marketing piece had almost exactly the same take on the story, referring to Garry’s claim that “the industry may have to revive some form of commission if it is to engage consumers who were disenfranchised from advice by the RDR”.

Intriguingly, what Garry seems to be proposing is a return to a 1980s Lautro-style Maximum Commission Agreement, where an adviser operating out of an office in, say, Belgravia, with its attendant overheads, would receive the same payment as one in Birkenhead.

Then there is my comment about Garry calling for a “Fimbra-style” regulator for advisers. Fimbra, lest anyone has forgotten, was a self-regulatory body for IFAs operating within a statutory framework underpinned by the 1986 Financial Services Act.

Again, I turn to a story in Money Marketing, which read: “Adviser trade group Libertatem has launched a fundraising effort to support its lobbying for a separate regulator for financial advisers.

“The group is targeting the ongoing Financial Advice Market Review and plans to lobby the Government to consider a separate, professional advice regulator in its proposals ahead of next year’s Budget.”

A separate report in another paper quotes Garry as saying: “We want to see the creation of a new regulator, separate from the FCA.”

Apropos of adviser-only regulators, one curious sidebar is that this is not the first time Garry has launched a mass fundraising exercise to promote one of his campaigns.

Twenty years ago, when running the IFA Association, he mounted a judicial challenge against the Securities and Investment Board’s attempt to force advisers to review their clients’ personal pensions. He lost that one and the IFAA was forced to pay SIB’s costs to boot.  As for the campaign itself, well, we all know how that one went in the end.

Garry has since described this as “IFAA putting itself in a unique position, being the only one willing to speak up for those who are the real consumers”. Right.

The problem with dual realities such as this one is they only truly work if other advisers buy into them. Unfortunately for Garry, the evidence points the opposite way.

More and more, it looks to me like Garry’s time is up. Still, in his own parallel universe he probably thinks he has already won.

Nic Cicutti can be contacted at