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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



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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Nic, I recon its you who’s time is up – in fact it was up long ago. Look at the comments posted for your articles these days – they are a fraction of what they were and are declining by the week. Frankly your Cautionary tale that starts the piece followed by paragraphs of boring hogwash are annoying at best and the consensus is that people are fed up reading it – you are “old hat” I’m afraid.
    Personally I’d certainly prefer to listen to Garry than you Nic and instead of attacking him sit back and think. RDR has actually worked far better than most people including me thought it would. We all are aware of the advice gap but Garry is the only person to come up with suggestions as to how to solve this problem. RDR Is Great for the rich or clients with established portfolios etc. but the 23 year old graduate starting out who wants to put £100.00 pm into med to long term savings has little or no chance of getting quality advice unless he pays an up front fee of £300 plus or has a large chunk of his first years premiums going to the adviser. Then there is the lower paid sector that has been left in the wilderness which frankly is a crime against humanity. Reintroducing commission at a fixed rate or factoring on all regular premium Isa’s, Pensions and Friendly society savings plans where the Insurance or investment company “loan” the adviser a fixed fee over X years which is partially or fully repaid by the adviser should the client cease the plan in that period, is the only way in my opinion, to plug this gap and get all advisers willing to advise on these areas. Instead of mocking Garry for cheap laughs and being cynical why not come up with another suggestion? You can’t can you , not one that will work anyway. Switch off the light when you leave Nick, these pages need Ideas people not cynical washed up has beens!

  2. Whats the difference between ‘member subscriptions’ and a ‘fighting fund’?

  3. We wouldn’t be in this mess now if the Maximum Commission Agreement hadn’t been abolished by the FSA on the pretext of promoting competition ……..ha ha ha ha !!! Look where we are, when Regulation is costing the industry £500 Million and the amount of people left in it are at their wits end !!!! As for Garry Heath , time to learn a new song fella and stop asking for hand outs, Ciccuti should try and find some honest employment as well, they are well suited from a past era.

  4. @Stephen Lyth. If I recall it was the Office of Fair Trading that got the Maximum Commission Agreement abolished and it may well have been before FSA time as well. The argument was that it was anti-competitive and if abolished rates would fall resulting in lower premiums. The actual result of course was a huge increase with companies buying in business – HI Skandia!

  5. Oh for heaven’s sake! Commission puts you in thrall to the providers. They are the ones who pay you, while you are actually supposed to be working for the client. If clients don’t want to pay you, you either have the wrong clients or you are in the wrong business.

    Personally I really cannot understand why Gary Heath bothers. To plagiarise Lady Bracknell: “To lose one trade body, Mr Heath, may be regarded as a misfortune; to lose both looks like carelessness.”

    I’m sure he is perfectly capable of being an IFA (as he once was) and wonder why he is no longer. Personally I don’t buy into self-sacrifice.

  6. Nic

    It would seem that there is a significant groundswell that agrees with you. Just look at the posts on Gary’s doomsday article.

    It is very encouraging to see that we are not all daft and gullible.

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