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Nic Cicutti: Adviser trade bodies need to live in the real world

Trade bodies tend to live in a cloistered environment while advisers keep the industry on its toes

This week I have found myself thinking about Neil Liversidge, the big boss at West Riding Financial Solutions. Yes, I know, it is a weird way to start a column.

What prompted it was two things: first, there was the mainly positive reaction from many Money Marketing readers to my comments last week, in which I argued Pimfa’s call for unregulated investments to be excluded from Financial Services Compensation Scheme coverage was a huge mistake.

Among those posting under the online version of my column, there was a terse observation from Neil himself: “As noted, payouts are dictated on the grounds that the advice, not the product, is regulated. That’s why we’ll all get milked when idiot ‘advisers’ start putting little old ladies into peer-to-peer lending Isas.”

The second prompt was a job advert posted on Facebook by, yes, Neil Liversidge of all people. Basically, he is looking for a trainee administrator in his Castleford office. In Neil’s inimitable style, he promises generous pay and conditions, and great long-term career prospects to a successful applicant.

If you get the job, however, Neil says he expects: “First-class attendance and timekeeping. We don’t keep people who are habitually late/lazy/clock-watchers/early leavers and/or who let the side down. I work hard and long hours myself and I absolutely do not tolerate layabouts.”

What also fascinated me about the ad – and has struck me about Neil and many other advisers I have met and socialised with in the past 25 years or more – is the very muscular approach about what they feel is right and wrong, both in their dealings with clients and the world at large.

There is a strong no-nonsense sense of justice there: they do the right thing for people and expect others to do the same. I might baulk at some of Neil’s other political views but I recognise an underlying ideology of fairness in his overall approach to issues in general and the financial services community he operates within, in particular. This may shock some but I also happen to believe such an approach is common among many financial advisers, though not all.

I suspect this approach is also what guided Neil and others either into taking an active interest in trade body activism or becoming powerful advocates for advisers more generally.

But that also leaves me asking myself: if their views are so prevalent within the “lower levels” of the industry, how is it that they appear to have so little traction the higher up the echelons of power you go?

How is it possible, for example, that Pimfa fails to acknowledge that the reason why people end up with duff products like unregulated collective investment schemes is often because of poor advice?

If you simply held such a disgracefully anti-consumerist view that would be bad enough. But in Pimfa’s case, it actually wants to exclude people who were mis-advised to invest in a Ucis from receiving redress by the FSCS. To paraphrase Strictly’s Craig Revel Horwood, that is simply un-be-lievable.

So how is it that trade bodies end up reflecting views that do not chime with the underlying sense of equity – defined as being fair and impartial – which many of their members hold?

I suspect it is for several inter-connected reasons. One of them is that trade bodies like Pimfa are isolated – and insulated – from the world at large. Their top bods pinball around from members’ conferences to industry seminars, from lobbying meetings with civil servants and regulators to evening drinks with politicians and chief executive dinners.

Most of their dealings are in London, away from the hurly-burly of “real” life. The 2015-2016 annual report is quite instructive here: almost 50 per cent of all Pimfa regional events were in London, with the Midlands garnering 3.9 per cent, less than the Channel Islands at 5.9 per cent. The North-East and North-West of England limped in at 7.8 and 9.8 per cent respectively.

In that cloistered environment, it becomes easier to believe it is impossible for someone to be bamboozled by an adviser into taking out the wrong product. More dangerously, it becomes possible to argue that, if clients do buy the wrong product, it is always their fault and they should receive no compensation as a result. Any sense of wider moral fairness that Neil and so many like-minded advisers believe in is excluded.

In total contrast, I believe that, whether they like it or not, trade bodies representing advisers are part of a wider community which includes consumers and those – like Which? or Citizens’ Advice – who speak up for them.

As much as the occasional intrusions from regulators and politicians, it is the interaction of advisers with that community, plus some scrutiny from the media (some of it ignorant, some absolutely superb), that helps keep the industry on its toes.

Which leaves me with two final thoughts. One is that we need more people like Neil Liversidge to speak out in support of ordinary consumers. The second is aimed at Pimfa: go out into the real world, talk to consumers and see what they make of your arguments. You might be in for a shock.

Nic Cicutti can be contacted at



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Not everyone will agree but I think you’ve got it spot on there Nic. It always fascinates me how few from the ‘upper echelons’ of our industry choose to enter an opinion or add anything useful to MM article message boards, even though it is clear that they read the said articles. Maybe they are too busy, maybe we are a lot of mouth with no bite (as I have observed before) or maybe they feel ill-equipped to enter the lions den; at least you do and credit for that!

  2. Nic, how much research have you done on this?

    Looking at the actual letters from APFA, WMA and PIMFA to the FCA on this subject I don’t think you are painting an accurate picture.

    From what I have read, APFA indeed were suggesting what your article says. However, this was in the context, and on the condition, that the rules were changed to effectively prevent retail clients from ever receiving advice on, or being placed in, unregulated schemes. In addition, the letter went on to suggest how this might be done, including closing down loopholes that less savoury advisers currently use.

    My personal experience of trade bodies and their leaders is very much at odds with what you are suggesting. Perception is a curious thing but when this is published as fact then some level of due diligence should be exercised. Perhaps you don’t care, after all it’s a good story.

  3. I am with Neil on this, why should we “the regulated” pay compensation to people who talk to the “unregulated” and buy “unregulated” products. These products generally show unachievable returns which is why people are drawn to them.
    If I was offered a scheme with “no risk” that returned 20% a year and was underwritten by the FSCS then it would be a no brainer to do.
    But the FSCS is underwritten by “regulated” advisers so guess who would pay for it?

  4. That’s because Nic, in the world of financial advisers we have certain types of individuals that are sadly starting to reflect the world at large. Financial Services in general is becoming more populated by what I would call Billy Bulsh!tters, we’ve always had some but they are on the increase. You only have to read publications such as NMA to see them every week. Believe me, I’ve worked with some of them as well. Of course there are the liars, thieves and conmen that exist just as they do in every walk of life, those who misbehave and get us all tarred with the same brush. Then there is the old school, but even then there are 2 types, the ones that haven’t moved on because they can’t or won’t change and then there’s people like Neil and having both met him and read many of his comments and articles, I would probably include myself as being of a similar ilk.

    We aren’t dazzled by the BS, the flash suits and the BA’s or MA’s from Cambridge. We can see that the emperor isn’t wearing any clothes and that popularity isn’t judged by how many friends you have on Facebook or connections on Linked-In. The real world isn’t online, you’re not a movie star because you’ve made a podcast. You’re not an author just because you’ve penned a boring book on behavioural psychology, sales or how to be successful. Raising money for “charidy mate” and making a song and dance about it doesn’t make you a good person(usually its signifies the opposite). You don’t need Twitter or Youtube to be a better adviser. Passing 500 exams doesn’t count either, so what? You must have been the boring swot at school with no mates and you’re still the one who stands at events on their own as everyone can see the scars from your personality bypass.

    At the end of the day Nic, some people just want good old fashioned honest face to face advice from good old fashioned honest advisers. Advisers who call a spade a spade, don’t always tell you what you want to hear but always tell you the truth. Advisers who are as straight as the day is long and do all they can to look after the people who have been good enough to put their trust in you.

    We are people who want to make a difference but sometimes it is better to do it on a small scale out there in the real world. Trade Bodies, Professional Bodies, Regulators and the like are full of the worst sorts of people, the “Billy’s” of this world. They’re not there to make a difference, they’re there because they think it looks good on the CV or a useful stepping stone on the greasy ladder of progression. Sometimes people like Neil have foolish notions and think that they can change these organisations from within, but eventually when you’ve bashed your head on a brick wall long enough and you realise that you’re outnumbered you go back to the real world to help the people who’s lives you can change and just ignore the “Billys!”.

  5. I liked the first half of Nic’s article, but disagree with the second part (no surprise there). The reason why FSCS protection on Unregulated is being argued is those who don’t reccomend them (even if we have to consider them to remain IFA)end up payoing for thoswe who do inappropriately whern neither we as advisers, nor the trade or proffessional bodies have any control over those who regularly sell duff investments. This is all in the (potential) control of the F-pack, yet they fail to control or access appropriate data and yet expect the rest to pay for it.
    What many are arguing is the status quo is not working, so they have two choices 1. regulate unregulated or 2. remove it from the FSCS levy…. one or the other.

  6. Two weeks on the trot….. a very fine article Nic

    I fine complement to Neil too !

    Good are advisers are strong both in commitment and integrity, that is what our client demand.

    You ask a valid question how come people like Neil (or others) have little traction ?

    My belief is, one of coverage, we as advisers are singular, in that we deal with a bespoke problems, aims and objectives,on the flip side trade bodies, regulation, government and press have to (find it easier) take a broad brush approach to encapsulate everyone and all, this although, may have grounds for being correct but in the same breath be so very wrong.

    The trouble with this is the bad are allowed to continue (until caught) their trade in grabbing as much cash as possible, the good are suffocated by red tape and negativity

    We are collectively punished, held responsible, named and shamed for the actions of the few or the individual.

    Like the kitchen wall….to the occasional viewer it will look neat and tidy, only the painter with know the small spots of trouble brewing underneath, and the good parts will be infected by the same.

  7. Nicholas Pleasure 24th November 2017 at 9:54 am

    It would be a good idea for the regulator to move its IFA division out of London and maybe base in in Birmingham or Leeds. This might knock down the Ivory Towers and let them see the real world.

    Other than Garry Heaths lot, the trade bodies are basically useless and wonder why they remain largly unsupported. Pimfa’s days are probably numbered.

    On the regulated advice/unregulated investments/FSCS issue the answer is obvious. Regulated advisers can only sell regulated probucts. A special permission is required for unregulated and that will come with enhanced PII cover and say £200K of capital adequacy. Easy – so why does the FCA do nothing?


  8. Trevor Harrington 24th November 2017 at 11:40 am

    I believe that the Regulator is concerned not to create too many definitions or “subsections” of Registered Adviser.

    For example – we already have – those who hold client money and those who do not – independent or whole of market and tied agents or restricted – etc etc …

    The problem to the Regulator is simply that the more sections and subsections they allow, the more complicated it becomes for the consumer of those services to understand what they are covered for and what they are not, in the event of a “problem”.

    As discussed, certainly there is a marked reluctance on the part of the Regulator to carve out products which might be covered (regulated products) and those that are not (unregulated products).

    In my opinion, whilst the regulator refuses to get involved directly with overseeing those Advisers who regularly incur the complaints then this will always be the case.

    We are always seeing Advisers in the media who have misbehaved, and they continue to do so, despite the calls from the profession for the Regulator to get out there and go and see what the miscreant Adviser is actually doing. The Regulator prefers to sit in their offices and try to regulate from afar.

    If an Adviser is misbehaving (receiving obvious complaints), and the fear must surely be that they are continuing to misbehave, then a visit from an experienced Adviser would resolve the problem a lot quicker than trying to invent new rules, and then regulate from afar. By that time, the miscreant Adviser who was creating few small problems, will have become a rep[eat offender on a grand scale, over several years.

    The problem then comes for the Regulator – how do they find experienced Advisers who can go out to see the suspected miscreant Adviser?

    In order to do that, the regulator will have to recruit from the retired and semi retired bank of successful Advisers …. and that is something which they have steadfastly refused to do for over 30 years … for any of their functions … why?

  9. Dear Nic

    Very interesting and perhaps some of your observations are true, but I think you have missed the main and most telling reason. Trade bodies rely on member subscriptions, therefore they tend to accommodate the big players and particularly the platforms. In this respect the old adage was never more true. “He who pays the piper calls the tune”

    In my time with AIFA I saw this time and again. Huge outcries against increased capital adequacy. Antipathy to the RDR particularly with regard to higher qualifications. Hysterics about fee charging. All in all in my view consistent with the longer effects of forever seeking to maintain the lowest possible standards so that they could maintain the highest possible income.

    It is therefore of no surprise to me that commentators such as you find these organisations somewhat out of touch.

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