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Nic Cicutti: Adviser attacks should not detract from pension freedoms debate


One of the intriguing behavioural aspects of many online comments at the foot of columns in this publication and elsewhere is the way so many of them tend to follow a cue set by the first few posts responding to the article itself.

What tends to happen is if someone says a columnist has made some “good” points, others follow. The reverse also happens: one or two initial negative responses set the tone for the others.

Ah yes, someone will say, but given how online commentary involves the collective response of a common audience – Guardian or Telegraph readers, say – is it not more likely that reactions to that article will tend to be similar?

My own experience suggests if the first people below the line are negative about what you have said, even if the comment piece actually validates and supports the views of its readership, they will often set the tone for those who follow them.

For an example, take a look at Compliance and Training Solutions director Melony Holman. Melony has been involved in the compliance field for more than 15 years. In an article published online, Mel looked at the compliance consequences for advisers of the pension freedoms announced in last year’s Budget.

She points out by taking cash early, the client might not only set themselves up for a larger-than-expected tax bill but their decision could massively reduce the long-term income they and their family have to live on in old age.

Mel’s piece sets out out the FCA’s position on the issue, where advisers are expected to take sustainability of income into account where they advise clients to take lump sums from their pension.

The FCA handbook states that any advice should take into account a client’s investment objectives, his or her need for tax-free cash and state of health as well as current and future cash requirements, existing pension assets and, assuming this is one of several plans, the relative importance of this one plan, given the client’s other financial circumstances.

Mel then advises on the compliance audit trail necessary to demonstrate how the adviser arrived at any advice given and its client suitability. She warns against assuming that simply accepting a client’s decision to take the execution-only route is the answer to the issue: “If there is any hint of advice or research being conducted for the client, then this is not execution-only.”

What I liked about Mel’s piece is her advice on what should be done about a client who insists on a particular course of action, against all advice. Again, she argues the adviser should make clear his or her view in writing and ask the client to acknowledge this, also in writing.

What I found most interesting in Mel’s original piece is a throwaway comment at the end of her piece: “It is important to remember that the adviser can refuse to work with a client on an execution-only or insistent client basis if they believe the client is taking the wrong course for their circumstances.”

For many advisers, telling a client they may have worked with for decades that they cannot in good conscience carry out their instruction because they think it will cause them long-term harm is probably the most difficult thing imaginable.

It carries with it not only the prospect of that client walking away from the business and taking a large chunk of your income with them. It also fractures, perhaps forever, what is likely to have become a friendship developed over many years of working together.

Yet it may sometimes be necessary for you to stand firm, regardless of consequences to you, if you believe your client’s decision is fundamentally wrong.

All interesting philosophical comments – and I would be interested to know what other people’s views are as to how they might manage their relationship with clients at such a difficult time.

But almost as interesting are the responses, one of which reads: “And you get paid for this sort of [blindingly] obvious stuff do you Mel? Nice.” Actually, my guess is she didn’t get paid for it, but let that one pass.

Not that it stops another person agreeing two posts later: “I prefer your more succinct reply to my own. Which also wasted less of your day.” A couple of posts below that we get: “Mel, stop trying to sell your copper bottomed compliance consultancy. Stop attempting to scare us, funnily enough we know how to do the job.” 

It takes others, including Julian Stevens, a denizen of this parish, to return to the key argument. Julian writes: “If a client is insistent upon going against your advice, walk away.”

Both Julian and several other posts make valid comments, looking at Mel’s piece from both a regulatory as well as a compliance angle. But what stands out is the snide attacks on a professional trying to offer advice and generate a debate on an issue many advisers are likely to face in the coming months.

Some advisers really can’t handle a proper discussion, can they?

Nic Cicutti can be contacted at



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There are 12 comments at the moment, we would love to hear your opinion too.

  1. Nic, don’t think you’re going to gte many response on this article, you’re being to reasonable 🙂

    Phil Castle
    Owner, Financial Escape Ltd

    I was thinking last year of having a grading system for insistent clients and calling it my stupid service.

    1.I advise you to do this

    2.This is one of the options I thought of, but not what o would recommend

    3.I would not recommend this, but nor would I advise against.

    4.I think you are being silly, but on your head be it.

    5. I think it a stupid idea, but I can only advise against. I will do it if you insist.

    6. You are insane, find someone else who is too if you want to do that

  2. You make sense here Nic. If any of our clients go against our advice we would walk away, we can afford to walk away. And have done so. And we will invoice the client for the advice we give because we set it up that way at the outset. No advice is advice though and advisers need to document this carefully. As for getting the client to sign any disclaimer – do not bank on that disclaimer! Get your own records clearly documented as you would normally do.
    I feel that the snipes at compliance people is an ingrained reaction especially amongst the networks where there is a tendency to manage to the lowest common denominator. Advisers have spent much time fighting against compliance consultants and you need to be aware of this fact. Dare I say it in case any compliance people I know are actually reading this who I publicly acknowledge are very good and helpful, some consultants are very poor.

  3. One of the intriguing behavioural aspects of many online columnists in this publication and elsewhere is the way so many of them tend to follow a cue set by the first few posts they get in previous articles.

    What tends to happen is if a columnist gets a negative reaction by making some “good” points, other similar articles follow. The reverse also happens: one or two articles without negative responses set the tone for the next one.

    Wonders never cease 🙂

  4. I didn’t read the article so can’t comment on that specific issue, but I have had my say on one or two compliance consultancy blogs where I feel that they assume the advisory high ground without actually having been there themselves. We all have skillsets which should be respected, one just has to be careful not to venture to far off-piste with their views perhaps.

    However, there is certainly no reason to be aggressive and nasty I agree and debate is a good thing (especially as I am always right in the end .. on everything!) 🙂

  5. The trouble is half the time you’re trying to have a debate with a block of wood whose only experience of financial services is gained from a compliance manual. You sometime wonder how we’ve got to this position but this always seems to happen when you give someone more responsibility than they have capability. The lack of respect shown by some of these people living up there on the hill towards actual practitioners is at times breath-taking (you would even think they get some kind of sadistic pleasure from acting they way they do) and its not always easy to remain professional or polite when trying to have a rational conversation with a walking compliance manual. Its their interpretation of the rules that count and you can also could bet the price of my house they’ll go overboard 99% of the time. Its actually suffocating this industry to the point it will be easier to write nothing.

  6. @ Grey Area: Clever pis**-take, but wrong. My interest in Mel Holman’s article was that I thought she raised some useful points worth discussing in MM. Imagine my surprise when I then read the responses to her and saw negativity, not so much towards the article itself but the writer. Uncalled for.

    And it reminded me of similar things I’d seen with other columns, including my own. On a purely personal level I’m not too bothered, goes with the territory. I just find the psychology of the behaviour itself fascinating.

    However, I feel sorry for those who are inveigled into writing something, usually because they think it might help others and, yes – let’s be honest – raise their profiles at the same time. What they get instead is a no-mark coming out with a non-constructive comment. Pathetic.

  7. @Nic Cicutti
    I’ll take that as a compliment and nice rebuff, but misguided. I got your point. I was interested in the parallels with the behavioural aspects of your columns. More often than not you make fair points and raise important issues. However, there is usually a barb or unecessary dig at advisers which seems to be intended to povoke an emotional reaction and you are the master (and I have on occasion shamefully succmbed). Feeble. On the relatively rare occasion you get thanked and agreed with there is invariably a return to type the following week. Sadly, as with Melony, these reactions often overshadow the valuable contribution and the moment is lost.

    Worryingly, I’m feeling rather honoured I got a mention from you… perhaps it’s the start of something 🙂

  8. The debate on the pension reforms should also look at if the MP pension freedoms and the (so far) non response by the FCA.
    By opening up the pension cash in, or drawdown or other, freedoms, Mr Osborne has questioned the very reason for pensions in the first place.
    After 6th April, a pension is really just another tax wrapper for longer term savings, internally just like a stocks & shares ISA, but, in exchange for tax relief at point of input, there are special tax regulations on exit. Just as an investment bond has a different tax regime to unit trusts, pensions dictate that the earliest age of access is 55, and only the first 25% can be taken without a tax implication.
    Is a pension there to provide income in later life? Could be. Is it there to provide funds for a cruise? Maybe.
    The point is that we are stuck with the moniker ‘Pension’. Perhaps if we re-branded it the K375 allowance or something so divorced from the word Pension so as not to draw inferences between the two, we may be getting somewhere.
    The trouble is that the FCA has not bought into this, and someone should tell them to look at their processes.
    The Pension Wise service, as part of their logo has the words ‘Your Money, Your Choice’. Supported by HM government. So, under the rules provided by the FCA, it ceases to be ‘Your Choice’, and they also seem to think it is not the clients’ money but belongs to the pension scheme.

  9. Nic, of course you are absolutely correct in that personal attacks should not be made in comments sections of publications – particularly where they are made where the person cannot be identified and held to account ‘out here’. And again you are spot on with your use of the word ‘some’. The majority of advisers never ever comment on blogs, let alone on MM articles and so that a tiny percentage of the tiny percentage that do are allowed to be personally insulting is not really acceptable.

    Twitter has recently faced a storm of protest over rude and abusive comments posted anonymously and their CEO has come straight out and said that they should have done something about it. Other online publications/forums have also faced similar criticisms. Its a real issue for journalism generally given the move to online publication and relatively open access for anonymous comment.

    There isn’t much I or any of the 99% of advisers out there who would never insult someone in this manner can do about the one or two who are rude or abusive, although many of us are no doubt absolutely mortified when we read these comments and would apologise on behalf of others if we could… but there is something you, and MM can do. As you’ve identified and publicised this issue, can you please – on behalf of the 99% – ask the editor/moderator at MM to stop comments containing personal insults from appearing at all.

  10. “Some advisers really can’t handle a proper discussion, can they?”

    What like when you wrote in an article recently that I was like “Victor Meldrew”, that kind of proper discussion you mean?

    Come on Nic let’s have some consistency, please

  11. P Forbes makes a good point about stopping comments of a personal nature – I would go further and say the comments that come away from the subject should be ignored also – an example being from a couple of weeks ago when Nic’s column turned into a rant about corporal punishment in schools!

    Nic’s columns are purposely written to encourage a response, that’s how the debate should begin, if people are unable to put their point across in relevant and respectful way then it cheapens it for the rest who can.

    Almost every week the comments sections are over run by those who cannot accept the views and experiences of others may be different to their own.

  12. This is slightly unfair Nic

    I know the article you are referring to (in another forum). Some of the responses did indeed raise the points that you cite. Other responses however (e.g. mine) were supportive, pointing out to colleagues that Mel was offering them free advice and whilst some of it might be ‘blindingly obvious’ (or whatever the phrase was), I explained that Mel was making her points in the context of too many advisers not doing ‘blindingly obvious’ record keeping. I also contacted Mel offline to say how much I appreciated her article.

    I didn’t agree with some of the more critical comments – one author in particular who you do not cite – but it was a balance of opinions and certainly not a crowd of us all saying the same thing.

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