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Nic Cicutti: Garry Heath’s Libertatem is sinking into oblivion

Nic Cicutti

For anyone who rides a motorbike or a scooter, February is one of those exciting times as you start to prepare for the long-distance journeys you hope to be making over the next few months.

As a vintage scooter owner who carries out most of his own spanner work, I am often in a dilemma: do I spend my money on proven – but expensive – products that will give me thousands of miles of trouble-free riding? Or do I go for the cheapest bodge, save myself hundreds of pounds, but risk my machine breaking down three months down the line?

For me, it is no contest: quality trumps price. I do not want to be stuck swearing at the side of a road in a foreign country this summer, hands covered in grease, all because I tried to save 200 quid instead of fitting a new crank to my bike  in January or February.

Which is why I simply do not understand the mentality of some advisers who, when faced with the choice of paying a reasonable fee for the services of a trade association they really believe in, decide they would rather save themselves a couple of hundred quid and sign up instead for another body they do not really like that much.

Yet that is what we are being asked to believe is happening at Libertatem, Garry Heath’s representational vehicle, as it competes – presumably with Apfa – to attract more advisers to its fairly thin ranks.

According to Money Marketing last weekLibertatem has revised its fee structure so that instead of a firm with three advisers having to pay £720 a year, it will now pay £600. A firm with 10 advisers would pay £1,440 instead of £1,800 annually, a saving of £360 – or £36 per year for each adviser.

Although this was not reported in MM, elsewhere in the financial advisers’ blogosphere Heath claims to have faced difficulties in recruiting members because Libertatem’s fee structure was such that it could not compete with Apfa in this “middle market” for advisers. Cutting fees means prospective members will no longer be able to use costs as a reason for not joining Libertatem.

Last year, a few months after Libertatem’s launch, I wrote in one column that Heath was being forced into considering just such a membership price cut.

At the time, my claim never made it into print, either for lack of space – or possibly because there was no evidence to support it. Well, now it is out there.

I must say I find this suggestion of potentially divided loyalties between Afpa and Libertatem because of a few pounds’ difference in membership fees to be utterly amazing.

The two trade bodies and their members are quite honestly chalk and cheese in terms of their public faces, never mind the differences in policy and, crucially, the strategies each has in terms of trying to achieve its goals. I cannot imagine anyone choosing one over the other simply to save £40 or £50 per adviser.

No, I fear the truth is far more prosaic – and it is that Libertatem is slowly sinking into oblivion.

At its launch in May last year, Heath set some incredibly ambitious growth targets for his new trade body. He said he wanted to recruit 4,000 individual advisers and 1,200 firms – 20 per cent of the directly authorised market – in the next 15 months. Financially, the aim was to raise up to £1m in that time, roughly equal to Apfa’s annual £800,000 budget.

Nine months on, according to the same blogosphere I referred to earlier, Heath now admits he has “over” 100 members and he hopes to achieve a far more modest objective of 500 members by the end of 2016, five months after his original target date.

Readers will also recall Heath launching a separate £50,000 fundraising campaign last November, with the aim of hitting that goal by 1 February.

Well, we are now a little past that deadline: I know at the start of the year there was talk of £22,000 having been raised, with the remainder being delayed by the Christmas season. Presumably, advisers were all too busy spending money on each other to send Libertatem a cheque.

Again, it would be interesting to know whether that particular target has been reached. My personal guess, however, is Libertatem will have hit neither its immediate £50,000 total nor its overall membership goals by the end of the year, drastically revised or otherwise.

I know there will be some readers of MM asking why I am picking on Libertatem.

My reply is simple: if you are demanding accountability and the truth from regulators, the Financial Ombudsman Service, the Financial Services Compensation Scheme and other organisations that impact on advisers, you have a duty to demonstrate some of that same accountability yourself.

More importantly, it is time advisers either put their money where their mouths are or they admit to themselves that, far from this being just a question of saving a few quid, they simply do not agree with the representational approach espoused by Libertatem.

If so, far better to put Heath out of his misery now than let him limp on into the summer. Trust me, he will thank you for it one day.

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

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Comments

There are 39 comments at the moment, we would love to hear your opinion too.

  1. As is so often the case Nic has formed an opinion and then searches for facts to back it up – probably qualifies him as a FOS adjudicator.

    The truth, as is often the case when commenting on one of his articles, is far more involved. Many advisers are too busy surviving to involve themselves. Others are afraid to stand up and be counted in case they are targeted by vengeful regulators. Some others see a free ride where other people pay and they then gain the benefits. Many do not understand or even want to understand the issues and therefore have no opinion with which to debate matters. Another sector believe that nothing can be done to stop the unelected and un-appealable from squashing their rights.

    Adviser representation has been uniformly poor. AIFA has suffered from the personal ambitions of various Director Generals and the belief that rhetoric rather tan actions can carry the day. APFA has its own comfortable methods which they seek to retain despite proof that it generally fails to make a difference.

    Unlike the majority of adviser representatives Garry understands the issues and has the contacts to make a difference. Representing advisers is a full time job, believe me I know. Asking for fairness, value-for-money and respect from the F-Pack is a thankless task which few advisers would consider and fewer still would attempt.

    So, let’s be clear, no adviser representative body is swimming in cash and, like any sound business, Libertatem adjusts according to the reality of life. To suggest that it is sinking into oblivion is more a case of Nic’s preferred end result than actuality.

  2. Wow Nick where did that come from?

    Whilst I agree with your reasoning I do feel that past experience of APFA and any other trade bodies in the industry has proved that they have appear to do very little for the benefit of the industry and their members and with that in mind there is indeed a call for a trade body such as Livertatem who are truly independent and actively lobby on behalf of the advisers they represent.

    Sadly Garry has clearly failed to get the traction necessary to make this happen but that does not mean that the need has faltered any.

  3. I pay membership fees to Libertatum and APFA. Before that I padi to both IFAC and APFA, before that Adviser Alliance and AIFA and before that IFADU and AIFA, before that BIFU and the LIA. I’ve also been a member of SOFA when also a member of the LIA and before that a member of the CIOB.
    My views change little, but representation does. The one thing I consistently do is pay to be represented.

  4. Time for a crowdfunding campaign a la Rebus?

    You could tell it was doomed from the start just by its name. Every time you hear it you get drawn back to those dark days at school trying to memorise Latin declensions. Is it the indicative? Is it the subjunctive? Does it mean For Liberty or By With Or From Liberty? Who cares? You cannot say “I represent Libertatem” without stuttering over the end of the sentence and sounding like a Nigel Farage caricature.

    To convince yourself that Libertatem is a good name for an organisation suggests that you have become totally convinced of your supreme rightness. You need people to know when you walk into the room that you’re not just any old lobbyist. You’re a lobbyist who can correctly conjugate his organisation’s Latin name into the accusative. Not for you the common-as-muck “Freedom”. Nor the only slightly pretentious “Libertas”. And woe betide the ignorant schoolboy who thinks everything is second declension and the accusative is “Libertum”! No, when you walk into the MP’s office with your business card saying “Libertatem”, they’ll know that they’re dealing with a man who knows the third declension off by heart, and therefore must surely be right about everything else as well. It doesn’t matter if people think the name sounds silly – you know better and that’s all that matters.

    Unfortunately, if you’re a lobby group, it ain’t.

  5. On the other hand, some realise that regulation is needed, consumers need protecting and they just get on with it without constant whinging at the F-Pack

  6. Nick you are a joke! You have some personal issue with me which goes back to a magazine, which has been dead for years. A minor change in our fee structure starts you off again. You have one good point and it is far bigger than your petty personal vendetta.

    Now is time for advisers to decide what they want and then support it. APFA’s current budget is just a third of the budget the IFAA had at its disposal in 1999. Libertatem’s numbers are growing but progress is not a quick as I hoped or in line with our pre-launch surveys. Advisers need well run representation well-funded and they need it now. 2 poorly funded bodies cannot do the job.

    As you prove every week Nick – talk is cheap. If verbal support was membership, we would have had it cracked in the first month.

    The decision advisers need to make is stark and it is Munich 1938.

    Either you support the appeasement of an unaccountable regulatory system which fails to protect the consumer, hits you with excessive bills and appears to be running its own version of Animal Farm in which the big players are not only too big to fail, but too big to be regulated.

    If so for God sake join APFA so at least they can harvest any crumbs they find under the FCA’s boardroom table more effectively. This will please Nic who cannot wait to demonstrate his nanny state credentials.

    Or you support starting to push back and demanding change. You can underpin the new found professionalism of the sector and get away from this unaccountable mess and towards a proper professional structure. That means taking action. As last month’s Parliamentary debate proved there is back bench support for change but do advisers want to keep up the momentum? If they do its time to stop prevaricating and join Libertatem.

    But remember one thing – this is it. If we leave the field there will be no replacements. Gill Cardy tried with a very gentle message. Libertatem tried with its more aggressive message. APFA has always been the appeasement kings. What other versions of the world is left?

    Or maybe it isn’t the message. Maybe advisers simply do not care enough about their future and hope to dive out the industry quick enough to avoid thinking about it. Advisers have always had their own association and its free! It’s called “Inertia” and it always had the biggest membership.

    Personally I have nothing to prove and nothing meaningful to gain. I have removed the mid-range issue so if cost was the issue that is no longer an excuse. I promised the Libertatem Team that I would give it a year and then reassess. – so 3 months to go. It’s make your mind up time

  7. The number of failed adviser bodies is fast becoming a joke. The only one that currently exists is APFA and that constantly struggles to keep afloat and will probably sink eventually. Liberwhatsis is evidently finding it hard to attract members (who probably find the title a bit of a mouthful) – as did Gill Cardy’s worthy effort – we are all aware of the reasons. But reasons and excuses don’t really hack it.

    The professional bodies will eventually take their place. The se bodies have the one overriding advantage – they supply the SPS that all need in order to practice. It was AIFAs shortsightedness in not applying to provide these (as I had mooted when a director) that prevented them from achieving a more secure position.

    • Well said Harry.

      • People might not think that APFA, Gill Cardy or Gary Heath make a difference and see the cessation of a trade body as a failure, but unlike quangos, it is not the continuing existence oif the body, it is and influence they manage to have which matters. Gill did influence the debate via IFAC. It was her influence that resulted I me choosing to remain Independent and not go restricted, for which I thank her and IFAC. Money well spent.

  8. As well as being put off by the pretentious name, some of Gary Heath’s “Daily Mail” style ramblings come across as offensive.

    • Yep – I agree with you, but some of my own ramblings could be viewed as extreme, but I still want to be able to say them.

      • Same here, but I’m not asking businesses to give me thousands of pounds a year so I can ramble in MPs’ offices and claim my ramblings represent all IFAs. I confine my ramblings to MM and NMA.

  9. @ PG

    There is so much to put right – including assisting consumers, which is our main purpose – that without fighting for rights and fighting to end discrimination you simply become a passive victim

  10. Trevor Harrington 25th February 2016 at 4:20 pm

    Garry and Libertatem’s failure to achieve critical mass is the same as that which sank the IFA Centre.

    As I said to Gill Cardy of the IFA Centre, when I joined as a founder member, it will fail unless we have a few (probably no more than 6) specific objectives, around which we can all empathise and rally to the call.

    The only other thing which is needed to go alongside those few specific objectives, is a specific threat of disobedience.

    At the time, I suggested that the members regulatory fees should be paid through the trade body (IFA Centre in that case), and the threat of non-payment would be sufficient to bring the regulator to our table, and in the correct frame of mind.

    It is surprising how you can hold an institutions attention, when you threaten to cut off their livelihood.

    I know this sounds like “Trade Unionism” but if that is what it takes to get the regulator to do what it is supposed to be doing, for everyone’s benefit, be they the Advisers, the Clients, the profession as a whole, or indeed the well being of these critically important financial services to the public of our Country …. then so be it.

    We need to get nasty.

    • I was with you on that plan brother. FCA fees should have been paid to an escrow account and not the FCA or even better, FCA fees paid to the FCA still, but FOS fees to an escrow account and force them to carry out their debt collector action for the “unconnected” FOS! I suspect a judge might find it hard to enforce debt collection by the FCA especially if they don’t have a consumer credit licence!

  11. Nobody, least of all Libertatem, has said that regulation isn’t needed or that consumers don’t need protecting. The issues are:-

    1. the way in which the present regulator operates,

    2. the excessive and often pointless burdens it imposes on those it regulates and

    3. as a result of the proven mis-prioritisation of how it allocates its resources, that it so often fails to fulfil its statutory objectives (protecting consumers and increasing consumer confidence in the FS industry), plus

    4. rendering advice unaffordable for those of middle to modest means.

    Are those not the core subjects of the Treasury-led FAMR?

  12. Really disappointing that Cicutti has now sunk to the depths of a vindictive and personal attack against a thoroughly decent man who actually cares about about our industry.
    Shame on you and if i eas a betting man id be putting my Money on you disappearing into the Abyss before Garry does.
    No one reads your tosh any more because thats exactly what it is.
    Lets put Cucutti out of his misery now. He wont thank you but we will all be thankful.

    • @Richard Wright – who is wrong. If no one reads Nic anymore how come he is consistently the most remarked upon columnist. Evidently logic isn’t your forte.

      • @Harry: Nothing is wrong with Richard’s logic, your premises are faulty. No-one needs to read Nic’s articles to remark upon them, we all just read the headline and skip straight to the comments to post our angry reaction.

        Nobody actually reads Nic’s ramblings about what he did in his shed over the weekend or his youth as a motorcycling free spirit or what a brilliant debater he was at school and how these things are connected to all IFAs being awful.

        • Sascha, if my premise is wrong (which it may well be) then that is very sad. Commenting on something which has not been properly read and only the headline scanned is a very slapdash and indolent way to debate anything at all.

          • You don’t need to trawl a stagnant pond full of filthy water before you conclude that there probably aren’t any fish, and you don’t need to read Nic’s article all the way through to conclude that it’s a load of provocative old tosh preceded by some tedious narcissistic round-robinning, like the one he wrote last week and the week before that. (At least the online articles aren’t accompanied by a picture of his hairy chest that takes up a third of the page, like the print version.)

            Those who say “you can’t judge a book by its cover” are being silly if that cover says “Wayne Rooney – My Story” or “The Secret To Getting Rich Quick That The Government Doesn’t Want You To Know” or “Jeffrey Archer”. Sometimes the cover tells you that while the inside *might* contain something worthwhile, the probability is sufficiently low that it doesn’t justify the effort of finding out.

      • Your an idiot Katz – but well done for your really innovative play on words, never heard that one before !! I really don’t think that having more comments on MM is anything to crow about and most weeks it’s single figures – I read this one as I support Garry, he’s a good bloke and good for the industry where as Cicutti is a waste of space who struggles each week to find something to write about. His comparison with scooters this week was proberbly the worst analogy I’ve ever heard , rather like your poor play on words attempt !

    • The more confrontational Nic gets the better as the more advisers engage to argue against what he says which is wrong. The more reasonable Nick is, the fewer and shorter comments he gets. Nic is good at his job. I don’t have to like him 🙂 . Having never met him, I don’t know if I would or not.

  13. Thanks Richard

  14. Looking at this objectively; perhaps Nic has a point (not sure what it is yet) ? I have never met Garry, however if he is half the man I read and believe him to be, he may well be sitting there with a raised smile on his face (after all there is no such thing as bad publicity) if people are sniping at his efforts and character, if this is the case Nic has done him a favor ?
    To Garry, don’t get mad get even, make him (Nic) choke on his words !

    I echo, Trevor Harrington’s last words to his comment “we need to get nasty” so the more people like Nic throw stones (as Harry said his coloum is the most commented on) the nastier and more importantly stronger we will get, I get a good feeling Garry may be one of the few with strength and presence to turn the heads and ears of the MP’s (after all they have the power)

    So in parting….. thank you Nic for giving a fair and dedicated man the publicity in your well written article good or bad (makes no difference, we need to keep the people who may well make the changes we need in the spot light if this is Garry and the liberthingy team, then this is a small triumph !

  15. Munich 1938?

    Nope its Britain, 2016 – maybe thats where he’s going wrong.

    Why does everything have to be so dramatic?

    This isnt the onset of global war, its just financial regulation for goodness sake.

  16. Trevor Harrington ~ Who’ll be first to withhold payment of their next levy bill from the FCA, FOS, FSCS and MAS? Not you, because you’re already retired (good luck to you) and not, I suspect, anyone still practising, for the simple reason that to do so is commercial suicide. A mass revolt is impossible to organise so what’s the point of even suggesting that we try to bring the regulators to their knees by starving them of funding? It cannot be done.

    As for “getting nasty”, Evan Owen tried that and the FCA slammed the door in his face, so nothing was achieved by that strategy either.

    I’m usually careful to avoid posting negative opinions about any of Nic’s articles (whether you agree with them or not, they do attract a great deal of comment), but really, Nic, I would have preferred you to have railed against the adviser community for its apathy instead of advocating the swiftest possible consignment to the scrapheap of Garry’s effort to put together a less conciliatory and more proactive representative body than APFA.

    • Common sense is here. Good points. If there wasn’t apathy in the first place Gary’s effort would be redundant as Gill’s efforts would have come to fruition. At least she firmly espoused independence.

    • Trevor Harrington 26th February 2016 at 11:34 pm

      Evening Julian,

      Actually … retired once …. and have come back to “do a bit” as I do enjoy the profession.

      The beauty of withholding regulatory fees is that if the fees are funded through an action group or federation, such a s Libertatem or IFA Centre (as was), is that all those fees are withheld at the same time.

      The other point to that is that IFA regulatory fees are all paid at he same time of year (August/September), and therefore nobody would be required to become a martyr.

  17. But the only fees withheld would be those demanded of members of Libertatem and Libertatem’s membership represents only a tiny proportion of the regulated adviser community. The FCA would just remove their permissions and carry on regardless. It would make no difference.

  18. @ Matt Amber – in a free unfettered market business requires the use of commercial judgement – something sadly stifled in this overly regulated industry where commercial judgement is overidden by an unaccountable regulator.

    @ Harry Katz – go tend you veg patch nobody’s interested.
    @ Nic – get on your scooter and clear off !

    • In a free, unfetterd market, shady people take advantage of the lack of policing, consumers get scammed and e3ventually lose all confidence in the sector. Truely free markets do not exist, they are a pipe dream. Tell me whcih commercial decisions you have been unable to make due to regulation, that truely had a significant benefit for your clients? – Not including the ridiculous ‘choice’ of paying commission.

      • Matt I have one….. Not paying the fees and levies over the past 5 years or so that would have benefited my clients no end as I have had to increase them 3 times in that period instead of keeping them static. Oh here is another one……. not having to waste valuable time, money, traveling to pass exams, that (i can honestly say) has not benefited one of my clients, oh and another one…….having to trawl through endless reams of paperwork to do the simplest of tasks, again costing valuable time and expense that has to be passed on the the consumer. There are many more Matt which you may or may not agree with but the biggest is not being able to invest in my company, invest in new staff, make any long term (5+ years) plans, all primarily due to unreasonable regulation and costs……..

      • Oh and Matt, please do not believe the propergander from the FCA or its supporters that restrictive and bullish regulation will stop “shady” people or the down right corrupt and thief’s it never has and never will, while we (the good) get bogged down and pay for the bills and levies the bad just keep going full steam, that is fact !

        Oh and by the time the good ole FCA has caught a sniff of any wrong doing, the perpetrators have long gone spent their ill gotten gains, which we are left to pay for, good job the FCA have us to fall back on because with out us it would be certainly fall flat on it arse !

  19. Matt – ask a few mortgage prisoners about MMR (restriction of trade) or actually the fact that TELLING a commercial organisation they CANNOT pay commission WHEN that too is a restriction of trade and a commercial decision for them and them alone. AND having made that decision the market (not a quango) actually decides whether that succeeds or indeed fails in the same way as fees either do or do not – thats the whole point of a market !

    Not quite sure where you’ve been but free markets do exist in all walks of life except perhaps where a quango dictates without fear of consequence !

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