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Nic Cicutti: Better the devil you know

One of the sad things about the financial services industry over the years has been the unwillingness of many of its leading players to take part in public discussions over its own future.

Occasional spats do break out, warnings are given and open letters are written but, generally, most of us are none the wiser as to what a senior life company executive is telling a Government minister or an FSA armchair-warmer at the regular joint meetings they attend.

The reasons for such reticence are varied. In some cases, this is down to a reluctance to stir up a hornet’s nest in public. Senior executives prefer to do their talking privately, in the belief they can achieve more behind closed doors.

Or they are afraid of the potential consequences to their own careers if it becomes known they said something that ridicules Canary Wharf officials.

If it is the latter, one can only recommend a tactic used regularly with solid, if slightly cowardly, effect by some of those who take part in regular online debates on Money Marketing’s website – do not give your real name when commenting on something. The beauty of such a strategy is that it allows you to be offensive while protecting your anonymity.

Sadly, it is too late to help Prudential UK deputy chief executive Barry O’Dwyer, whose jokey comments sent out in an email to 2,500 of his company’s employees seemed to backfire on him last week, after they were published in the Sunday Telegraph.

My gut instinct is that O’Dwyer will now engage in a period of self-imposed purdah as he tries to overcome the embarrassment his remarks have caused within Prudential.

As it happens, I believe he has nothing to be ashamed of. He is a key figure within the industry and his views, right or wrong, are perfectly valid. It is important we know what he is saying to the FSA, as it is such debate that will ultimately affect the way we are regulated.

In that sense, for Prudential’s spokespeople to try to describe his email as “misjudged”, as they have done this week, is unfair to him and makes both the company and O’Dwyer look silly.

That said, O’Dwyer also needs to be aware that when comments are made that seem to impugn the views of people he is talking to – for example, members of the FSA consumer panel – he is potentially skating on thin ice.

O’Dwyer’s email said: “It became clear to me how much the personal prejudices of some key individuals can determine the direction of regulation. As with the treatment of legacy products on RDR, evidence sometimes seems to be overridden by prejudice.”

His email mentions the fact that the individual to whom he is referring once had a PruDirect policy he was very happy with. The FSA panel member also complimented the Pru on the quality of its service. “Yet five minutes later he came close to dismissing the whole of the with-profits industry,” O’Dwyer complained.

This raises two concerns. One is that it leaves the person concerned in danger of being identified by those who want to do a bit of detective work and, if so, he is defaming that individual by implying, without offering proof, that the person’s motives are driven by prejudice.

The second point O’Dwyer seems unaware of is that it is perfectly possible to have a with-profits policy from a reputable company, presumably bought in the early to mid-1980s when they were much more popular, and be happy with it – while at the same time being negative about with-profits policies in general.

You don’t believe me? I took out a Scottish Amicable policy in 1983, which turned into a Pru one, and it delivered perfectly respectable returns when it matured after 25 years. But I have also been extremely critical of with-profits products in general because of their heavy initial charges and in-flexibility, which made them unsuitable for all but a minority of those they were sold to.

My views are not unique among consumerists. For O’Dwyer to feign outrage at the possibility that they might be voiced by a member of the FSA consumer panel strikes me as bizarre. Is he really saying he has never heard such opinions before? If not, where has he been for the past 30 years?

There are other aspects of the email that are also self-serving, such as the attempt to ringfence existing policies from the effects of new rules on trail commission. It strikes me that the FSA has reached a messy compromise here, one that gives consumers a minor amount of leverage in their battles to achieve decent service from their IFAs.

It is nonetheless far better we know what O’Dwyer thinks than being left in the dark. At least then we can engage with, debate and test any ideas he might have. I would rather that than wonder about the identity of my own critics, including Hugh Jarse – although, for all I know, that may well be his real name.

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. Agree completely.

    The great pity of it all is the fear by the regulated of the regulator, and in return the motivational distrust by the regulator of the regulated. All leads to trench warfare, with most reluctant to look over the parapet, and the regulator, like many WW1 generals, having a remote view of how the front line really works (or not as the case may be).

    Signed (by someone who isn’t going to look over the parapet other than through a persicope!)

  2. If journalists were regulated by the FSA they would soon find out why reticence persists.

  3. All the while the FSA continues to act as an accountable monolith with its bizarre ideas about sensible investor protection and a totally cock-eyed view of its priorites I will continue to say that most of the people that run it (the FSA) are idiots and totally out of touch with the real world etc etc

    But here’s the thing in our free country they can’t fine or sensor me for having an opinion and one that I am certain is shared by the vast majority of practitioners.

  4. “The beauty of such a strategy is that it allows you to be offensive while protecting your anonymity”….is one interpretation, which suits Nic’s offering this week.

    Another, of course, is that it allows you to be critical whilst protecting your anonymity, thus allowing you to make valid counter arguments to a particular matter without the fear of retribution from regulators.

    Yet another interpretation is that it allows you to agree with a point of view whilst protecting your anonymity, thus allowing you to voice an unpopular opinion without fear of retribution from a baying pack.

    The use of a single interpretation to justify a whole argument when other interpretations exist is either lazy or deliberately provocative.

  5. I think the attitude of the regulators to anyone who puts their head above the parapet, is amply expressed in Sants’s comment ” Be Afraid, be very afraid” or words to that effect.

    RDR is going to be either the worst thing to happen to our industry or the best, but I doubt if it is the former as even the regulator now freely admitsl lower to middle income consumers may not be able to afford fee based advice services, which if the regulator and the FSCS and FOS keep putting up the fees, with a decreasing number of chargeable subscribers, then the whole proposed changes will become a bed of sand and we will all sink into the mire, never to be heard from again. What will Nic do then I ask?

    The foundation for our industry has always been a combination of consumer need, adviser motivation to sell to and address that need and be adequately rewarded for their efforts and consumer willingness to pay the price for satisfying that need

    Now of course “selling” is a dirty word “advice ” is a much mis used term and “advisers” may not have the range of products and funds to work with that previously were available.

    Take UCIS for example, although these types of funds present a higher risk than regulated funds (allegedly) some of them have had decent returns, but if the FSA bans their use, than it is restricting consumer choice, in direct contravention of the stated RDR objectives.

    For my money, the FSA is a failed regulator, but if the new FCA is peopled by the same bunch of ne’er do wells as are currently employed by the FSA, it will just get worse and may even prove uneconomical to run an IFA business within two years.

  6. Nic, I invariably read what you write and I find your views both thought provoking and often highly inflammatory. I try hard not to react because I realise that doing so would give you what you are seeking and I refuse to give you that pleasure. On the occasions when I have reacted and replied to one of your windups I have never done so anonymously or under any pseudonym despite possessing an oversized posterior!

    I would like to challenge you to utilise your influence and considerable literacy skills to more purpose and benefit to society in general and the financial services industry in particular.

    I believe that 23+ years of financial regulation have done little to improve the savings, protection and pension habits of the nation. In many respects it has made these situations worse. I find it utterly incredible that two Financial Services Bills have missed this completely!

    When I have challenged the FSA on this subject they show a complete disinterest because the law does not require them to be in any way cognizant of the effects of their regulation on these key areas of behaviour. What is the point of protecting the public to the point where they end up doing nothing? This is like the hospital on the “Yes Minister” TV series that meets all the targets set by the government but has no patients!

    I am on the AIFA Council and on the FSA Smaller Businesses Practitioner Panel but I have completely failed to make the FSA accoutable in terms of their regulation on these key aspects. Can you help me please?

    Dick Carne

  7. A sadder thing about the financial services industry is less that leading players are unwilling to enter discussion and more that leading players are engaging in discussions – but without any factual bases.
    It is easy to have an opinion. As Mr O’Dwyer has proved, it is extremely easy to put that opinion into the public domain.
    What it appears to be far less easy to do it to base opinion on facts. We may all interpret facts differently, but at least those facts should have an influence on the interpretation.
    There is precious little evidence that current opinion is in any way fact based, so it comes as a surprise to read that “evidence sometimes seems to be overridden by prejudice”. What evidence?
    If evidence is being used, and I strongly doubt that it is, perhaps it should be published so that it becomes part of the general interpretation and debate. Then others can determine whether Mr O’Dwyer’s comments have merit.
    The financial world does tend to operate in a fairy story world were innuendo counters innuendo rather than fact countering fact. Well that’s my opinion!

  8. Hi Dick. Thank you for your contribution. Yes, my views are likely to come from a different side of the argument to your own. That’s why, for instance, while I too am critical of the FSA, my own criticism is of its ineffectiveness and failure to supervise the industry effectively.

    Unlike you, I happen to believe in tougher regulation – not so much of IFAs, necessarily, but of the industry as a whole. With regard to your specific role as an Aifa representative, I am also critical of Aifa – although again, unlike some of the trolls who come on here to have a go for what I consider to be the “wrong” reasons, my own view is that any trade body must at least partly inspire its members and Aifa has signally failed to do so.

    On the IFA side specifically, I often recognise the many good things that IFAs do.Ironically, I’ve long argued that one of the functions of a trade body ought to be to publicise them more, which Aifa fails to do. It’s ability/willingness to talk to other consumer journalists outside the trade press is zero. No wonder, then, that journalists are increasingly cynical of IFAs and discount their views.

    I would also like Aifa to be much harder in terms of criticising bad practices within its side of the industry and come up with a plan that promotes a far more promotional image of its members as a whole, i/e making its members feel that the money they spend to be members is actually worthwhile. Sadly, I see no evidence of that happening either.

    What all this means is that I am unlikely to be an “ally” or “help” in the way you describe.

    But at the same time I do consider my function to have SOME use in what I believe are important discussions about the industry in general and the role of IFAs within it in particular. Whether people realise it or not, my main role is to try to make people think and debate/argue. I want people to comment – not because I measure “success” by the number of remarks or eyeballs on this page but because I regard debate itself, even hostile and abusive, as part of the process of clarifying positions. If, on the odd occasion I manage to make people think twice about something or change their minds, great. But even if someone goes away confirmed in his/her views but at least having thought through the issue and, perhaps, contributed to the debate, that’s great too.

    I also think the discussions between advisers themselves are invaluable in their own right. They help IFAs understand and appreciate different views – for example Gill Cardy, Martin Bamford, Alan Lakey, Neil LIversedge, Evan Owen’s and others’ opinions are at various ends of the spectrum but here they all combine and they have to test them out in the open. That, I believe, is my greatest service. Which is why I think it was fantastic when a spokesperson from the MAS came on here to defend the organisation’s work at the end of one of my columns. I disagreed totally with the points s/he made but appreciated the bravery on her part to come on here and argue them.

    That’s also why why I think you are approaching things from a mistaken point of view when you say that you don’t take part in debates because you would be “giving me what I am seeking”. As it happens, what I am seeking is different to what you think. I want open debate. Barry O’Dwyer, you, Neil, Gill, Alan, Martin all having a big argument about genuine issues that matter to IFAs.

    Sadly, what I often get is anonymous trolling. But hey, I can live with that. That’s part of the job too.

    Kind regards,


  9. Glen, interesting comment. But where’s the evidence for it?

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