View more on these topics

Nic Cicutti: Sesame advisers betrayed? More like railroaded


One of the most powerful emotions the human mind can experience is that of betrayal.

As many psychologists who have studied its impact on people’s lives have found, its effect can be devastating.

The US author Rodger Jackson writes: “Betrayal acts as an assault on the integrity of individuals, affecting the capacity to trust and contracting the possibilities of the world by increasing distrust and scepticism.

Betrayal changes not only our sense of the world, but our sensibility toward the world.” But for betrayal to take place, it seems to me, it must be something entirely unexpected, something with the capacity to shock precisely because it was considered to be the least likely option by the person who experiences it.

Which is why, when an IFA who happens to be a member of Sesame emailed just over a week ago to complain about the fact that his network is to become restricted, I could not understand why he was using the word “betrayal” to describe what was happening.

Yes, my friend was incensed by the move. He intends to remain independent and is not keen on the alternative option Sesame is offering, that of becoming directly authorised and using the services of the company’s support services provider arm, Bankhall.

As a result, he faces an enervating few months as he disentangles his operation from that of Sesame and finds another network to join. The costs, certainly in terms of his time, will be substantial.

I wish him luck in his search for a new network, for I suspect it will be a difficult one. I don’t see a huge movement towards maintaining current IFA status within a network environment.

Again, however, the word “betrayal” is a far too strong to describe the announcement. After all, Sesame has hardly been the greatest champion of genuine independence for years.

The reality is that for at least eight or nine years, Sesame has explored every possible way to move as many of its advisers away from even the old-style definition of independence.

Back in 2005, in the immediate aftermath of depolarisation, Sesame was one of the first networks to create a multi-tie proposition, Sesame Select, in which it created a panel of providers that included Axa, Legal & General, Norwich Union, Prudential and Standard Life.

At the time, even though its own research months earlier found that 73 per cent of IFAs wanted to retain their independence and only 9 per cent welcomed a multi-tie set-up, with the rest undecided, Sesame still went ahead with its plans.

Sesame commercial director Charles Bryant, who jumped ship from the network only a few months later, managed to keep a straight face when discussing the survey, insisting against all evidence to the contrary: “From these findings, the independent model continues to prove the most attractive to IFAs, with the multi-tie model attracting increasing interest from advisers.

“IFAs must assess the needs of their clients before deciding on the most appropriate route for their business. Ultimately, depolarisation is about consumer choice and disclosure, not independent status multi-ties. No doubt, what will emerge is a more streamlined industry focusing more on the value of quality professional advice.”

Having suggested that upwards of 25 per cent of IFAs would eventually go down the multi-tied route, Sesame Select managed to recruit several hundred advisers in the months that followed its launch in July 2005. But the operation has never been delivered success on a scale that that the company wanted.

Not one to admit defeat, Sesame launched a new restricted adviser proposition some 18 months ago, this time using a white label version of Axa’s Elevate Platform and a limited fund range from Optimum Investment Management.

A reasonable interpretation of this relentless move to restrict choice offered to consumers is that long before the recent FSA-inspired reforms, Sesame has long wanted to do away with the complexities, not to mention the expense, involved in operating a network of genuinely independent financial advisers.

The introduction of the RDR offers another opportunity to move away from the perspective of whole-of-market independent advice to the restricted model. Sesame is banking on the fact that advisers will want to retain their long-standing remuneration models and opt to become restricted.

Ironically, having spent the last 10 months studying the market to see whether IFAs were really interested in moving down the restricted route – and discovering to its chagrin that the vast majority are not, so far – Sesame has decided it will prod them in that direction anyway.

Will its strategy work? Well, it is certainly the boldest move so far. Sesame clearly would also love for its proposition to be called “whole-of-market”, or a variant that allows the distinction between independent and restricted advice to be blurred.

Personally, for the sake of advisers who want to remain genuinely independent, as well as the many thousands of clients they serve, I hope the strategy fails.

Sesame’s actions may be nothing like the “betrayal” my new friend claims it to be, but they are an attempt to railroad its members willy-nilly into a new business structure they didn’t ask for and would not want if they were offered a genuine choice. And neither would consumers.

Nic Cicutti can be contacted at



AJ Bell to rebrand Sippcentre platform

AJ Bell is to rebrand its Sippcentre platform as AJ Bell Investcentre in April. Speaking at the AJ Bell investment conference last week, chief executive Andy Bell said the move will help strengthen the link with the parent company’s brand and recognised the fact the platform had moved beyond from just offering Sipp investments. Bell […]


Lib Dem peer pushes for £300 cap on payday loans

Liberal Democrat peer Lord John Sharkey has tabled an amendment to the banking reform bill calling for payday loans to be capped at £300 and 60 day grace periods for all loans. The Government bill proposes the ring fencing of banks’ retail and investment arms as well as the abolition of the approved persons regime […]

The future of active management is now

Fees under pressure. Regulatory moves against closet indexers. Rapid advances in financial technology. Shifting sentiment among investors. Such mounting challenges have led to widespread speculation about active management’s shrinking future. But a closer look inside intelligent portfolio construction today tells a story of expanding roles, added value, and innovative risk-adjusted, lower-cost solutions. Four investment experts […]


News and expert analysis straight to your inbox

Sign up


There are 22 comments at the moment, we would love to hear your opinion too.

  1. The FCA should stay with the rules and regulations put in place by their illustrious predecessors. Either an adviser is independent or restricted. Restricted whole of market is a lie. Prospective clients need to know the status of an adviser clearly at outset.

  2. This is a topic that has interested me ever since Ken Davey invented the concept. (Indeed he had the perspicacity to realise that eventually it had become a broken model).

    As you quite rightly (in my view) imply that Networks and true independence were never easy bedfellows, one also needs to examine the reasons why advisers joined.
    Now once again I don’t envisage a great fan base for my opinions and am preparing my ear plugs for the howls of protests – but ….

    1. Members were frightened of regulation, couldn’t be bothered or wanted to face the effort of engaging with it directly and thought that by joining they could forget this unpleasant imposition and instead be spoon fed.
    2. Pre RDR they relied on the enhanced terms for commission that the Networks offered. How they equated this with the high costs of membership is best known to them.
    3. They weren’t particularly at home or au fait with some of the topics in which they were engaged (e.g. Pensions or Investments) and relied on their hosts to spoon feed the research and answers.

    That they were prepared to pay the very large costs involved remains a mystery to me – particularly in the case of sole traders. In the case of member firms with upwards of 2 RIs I will concede that help with compliance in these cases might well have been welcome, but at what cost?

    I also freely admit that there are some perfectly good advisers and firms within these organisations, but I still cannot fathom why they value membership. Unfortunately from what I have seen networks in general seem to have pandered to and protected the lowest common denominator instead of striving for the highest common factor – hence their forceful opposition in the early days to the RDR and qualifications.

    I don’t think I am alone in wondering how much longer this model as a conduit for independence will last in the new RDR and TCF world. That they will all morph into a tied model (new terminology – restricted) seems a given.

  3. At the end of the day providing financial advice is a business proposition. The directors of Sesame are not knights in shining armour upholding the cause of independent financial advice. They are business people who are looking to position the business so that it can survive in a difficult environment. The members must also look to position themselves so that they can not only survive but prosper going forwards. If that means that their needs are no longer served by Sesame, then so be it. They can become directly regulated or join another organisation that meets their needs.

    Nothing stands still in this business and advisers need to be alert to the environment and take appropriate action. They need to be proactive and not reactive and take their destiny into their hands as far as it is possible.

  4. Christopher Petrie 21st November 2013 at 10:45 am

    I’m afraid that Advisers within “Networks” are going to have to face up the the fact that “Networks” will no longer be anything of the sort. They will almost all be moving to a vertically-integrated National model, such as SJP and Towry over the next year or two. Advisers will be known as “Associates” or “Partners” or similar nomenclature, and will effectively become self-employed representatives of that Company, selling that companies Wealth Management proposition.

    To remain independent, Advisers will need to move to local or regional firms, or just go directly authorised with the FSA themselves.

    There’s no money for the old model “Networks” that previously housed hundreds or thousands of totally different business. That model no longer works. If they can retain 50% of their current advisers to work as reps of their own WM program, they’ll be pleased enough.

  5. Most IFAs are proud & protective of their independent status.
    Clients understood this i.e Independent means that you do not belong to a single provider and can sell a wide range of products from a wide range of companies.
    However IFAs who have been disliked by the banks & regulators for years have managed, by being adaptable, to survive all the regulator could throw at them are now put in a position where it is becoming increasingly difficult to maintain an independent status.
    This is because the definition of Independent has been changed by the Regulator to something that the Client does not understand and is virtually impossible to maintain.
    In effect the Regulator is saying that if you have any bias whatsoever towards any type of product/company/Investment you are not independent. How many of us can really say that we would consider every product for every client. It is simply not practicable or cost effective.
    Therefore by a drip basis they will eventually get rid of all IFAs which I suspect in spite of denials to the contrary this is what is wanted.
    After all there is an open revolving door between Banks & Regulators and Banks would be delighted to see the demise of the IFA sector.

  6. @NIck

    I’m sorry to say that much of what you say just isn’t true. How many times have you attended an event or seminar held by the Regulator? From what you have written it looks like very few if any.

    Even in the days of Hector ‘Be Afraid’ Sants, it was perfectly evident that the Regulator wasn’t anti IFA – just anti bad advice.

    From what I have seen of the new regime (at first hand) there really does seem to have been a shift in ethos. Time will tell. But if you really want to understand where the regulator is coming from you really need to engage at first hand. Don’t believe all you read and don’t rely on anecdotal evidence. Much of the bellyaching comes from Network members who don’t get or want the free access to the directly regulated firms enjoy.

    I’m not saying that everything is wonderful or that regulation is perfect – it’s just that your viewpoint in this instance is incorrect.

  7. If you transfer power both legal and regulatory to another i.e. a Network you give up that power and you give up independence. This is not the confused concept discussed by regulators but personal independence. The Network will act in their own interests and those interests may not be the same as their members. Joining a Network is akin to signing a personal guarantee to a bank and then professing surprise when they sell your house to clear and overdraft. Networks are a dangerous concept in a dangerous industry.

  8. @Simon Mansell

    Following your logic this must apply to every employee of an IFA as well. Therefore, the only true IFA is the sole trader or partner. Really? A large IFA or network that applies significant resource to research could comfortably argue that they are far more independent than a sole trader or small IFA could ever be.


    I can’t help thinking that you have just set your mind to the ‘fact’ that restricted is not as good as independent and networks are just plain bad for all the reasons you can think of. I was chatting to a turkey the other day and, try as I might, he just couldn’t see anything positive about Christmas. I thought he was being blinkered and he thought I was being obtuse…

  9. I left bancassurance last year and set up my own business under a Network restricted model. In the last year I have probably requested to go ‘off panel’ more times than not for the specific needs of my clients (and better products). One year down the line and my Network is becoming more restrictive and more expensive and am thinking of moving Network but hear that they are ‘all the same’. Is what Sesame is doing any better, or any worse, than anyone else?

  10. I tremble at the thought of disagreeing with the estimable Mr Katz. But the attraction of the network was that it was more or less free. The brilliant Ken Davy spotted that with a ‘collective’ he could get better commission rates than were being paid to the smaller firms. Those smaller firms continued to get more or less the same, and the commission uplift went to the Network.

    The net result, of course, was that the Life offices paid out more commission, and sponsored training and conferences and heaven knows what else for little or no return. They lived in fear of being taken off a panel, a fear that some of the network chiefs (though not the aforementioned Mr Davy, who always understood that the life offices and the IFAs were in fact mutually dependent) were keen to exploit.

    In short, the network simply diverted funds from with profit policyholders to network shareholders. The tough part came as regulation tightened, and compliance control got more and more difficult. Thus was born the support service company.

    What next? I’ve no idea.

  11. I still don’t know what was wrong with the traditional IFA model in that it afforded the adviser access to the WoM without requiring him to compare every potentially suitable product on the market on every parameter imaginable. The vast majority of clients certainly weren’t interested (and aren’t now, as the highly successful SJP will readily attest) and the vast majority of IFA’s either didn’t see the point or didn’t have the time or already had a clear idea of just which providers they did and didn’t want to use.

    It’s all a consequence of the regulator’s maniacal quest for some pie-in-the-sky Utopian dream that can never work, at least not for any but that corner of the intermdiary market dealing with HNW clients with deep pockets from which to pay their hefty fees. Hence we have an advice gap and, IMHO, the only way to address this from where we are now is for the FCA to allow a streamlined advice process based just on Proposition, Cost, Risks & Tax. It really doesn’t need to be any more difficult than that ~ does it?

  12. @ Dave
    Networks are inherently lazy !! the ethos is a numbers game get as many as you can charge as much as you can and do as little as possible !! by tying your hands and feet together by compliance it saves them having to work for a living !! Oh and getting a nice little back hander from the companies they tie you into ! oh sorry their panel !!
    I was unfortunate enough to be with a network back in 2000 for about a year (IFA practice I was working with at the time) basically I left them just to get shot of the network, best move I made.

    Its hard to give advice as I don’t know you or your business, but if you work on the assumption they are all the same your choice is stay put or go direct !! But I think you may have worked that out for yourself !!

  13. I find it staggering that a Sesame network member ever though the network would remain independent. Sesame have had a big shock. The FCA fine was the tip of the iceberg. Underneath there were massive repercussions from the Regulatory inspection of their inner workings not least of which was the lack of information available when the FCA came knocking. When you turn around to the FSA and say we do not know what money has been placed in a particular fund by your advisers they are not going to be impressed!
    A new management has concluded that the cost of providing PII, the provision for potential future liabilities as well as putting in place the essential systems and controls such as adequate IT meant that it was no longer commercially economic to allow advisers to go off piste under the independent banner.

  14. @ Grey Area

    Apart from the fact there seems to be no shortage of those posting who seem to take a similar view to myself. In direct response to you I would merely refer you to the Aesop’s fable of the Fox without a tail.

    @ Graeme Laws. Please don’t tremble I’m quite good natured on occasion.

    “The net result, of course, was that the Life offices paid out more commission” Quite so and are you going to now tell me that it wasn’t to the detriment of the client? If you are the self-same Mr. Laws that used to be with National Mutual, you may know that there were those of us that avoided wherever possible the regular premium pension route, preferring instead the single premium option with partially discounted commission. Something I’ll warrant that was not countenanced in a network.

    @Julian Stevens

    As I posted before the problem you have is that you are largely excluded from FCA events by nature of your Network membership. I was at the FCA yesterday and I can categorically tell you that your perception of the duties implicit in being independent are completely erroneous and are by no means as draconian as you have been fed by the apparatchiks in your network, who purposely want to sour the concept.

  15. @Harry

    And I would simply refer you to Aesop’s tale of the Dancing Monkeys.

    There’s a quote and saying for everything but it doesn’t make it so…

  16. @Grey Area

    I haven’t come across that one. Do you by any chance mean the Monkey & the Dolphin?

    There are indeed quotes for most occasions.

    In the round I do consider it a fact that restricted is not as good as independent and there are plenty of perfectly logical and valid reasons to back this up. If you mean that a specialist restricted adviser on his topic can be just as good, if not better on occasion than an IFAS I wouldn’t argue – but an IFA is the pinnacle – whether you like it or not.

    As to the networks I suggest you peruse some of the other posts – Simon Mansell’s in particular. The Networks have been a force for bad. That their members may not always be tarred with the same brush is another matter – but those entities do belong to the dark side.

  17. @Harry

    I don’t think there’s much between us though in my experience, although well intentioned, smaller IFAs are limited in what they can do in practice – just a resources fact of life. Don’t disagree on the networks either. In their current guise I think their time has come and gone.

    I did mean the Dancing Monkeys though the Dolphins is very much along the same lines.

  18. Cicutti has finally run out of steam, finally run out of something to write about, finally.

    Sesame is doomed, get off the melting iceberg and stop giving it free advertising.

  19. @Dave

    The answer to your question is no not all networks are the same. If you are looking for a network with a fresh approach and 100% commitment to its members and their Independent status check out Sense Network. You will be pleasantly surprised.

  20. Grey Area | 21 November 2013 12:36 pm

    You say: Following your logic this must apply to every employee of an IFA as well. Therefore, the only true IFA is the sole trader or partner.

    Answer: You follow the logic too far! The Network is the regulated entity and members sign over their independence, their personal assets and all in return for the pseudo protection that you allude to! It may be that you are a Network member and if you are my advice would be to get out quick, but of course getting out quick is not as easy for Network members! There are many issues but consider just this one: It is the Network that handles any complaint against a member. In turn, the member accepts and pays for pseudo PI with a “right of subrogation” clause. This clause allows the PI insurer to pursue the member following payment of a claim. In short, the member does not even carry PI protection. Network membership is generally an anachronistic and dangerous mode of trading within a regulated industry.

  21. @Simon Mansell

    Hi Simon. I am not a network member and I broadly agree with your analysis but that wasn’t what I was really talking about. Apart from subrogation your points generally apply equally an employed adviser.

    My real point was with regard to available expertise. A larger organisation has dedicated resource in respect of research and specialist knowledge that a smaller IFA can’t hope to match. Used properly that probably makes them a better IFA than most smaller ones.

  22. I think the two biggest issues facing the large and long-established networks are:-

    1. The potential liabilities inherent in their books of long-standing legacy business, which they’re now trying to balance out by draconian de-risking strategies going forward. Hence, everything must now be researched and written up to standards that’ll (hopefully) render them totally bomb-proof against any future challenge (against which there’s no longstop, so such challenges could come from any direction at any future date). And

    2. The regulator’s insistence (so they claim) on almost impossibly stringent risk management systems and controls, which is why network members now find themselves subject to intolerably intrusive levels of fault-finding and general micro-management of everything they try to do. Even the simplest of transactions, such as a simple ISA top-up, now seems to require a comprehensive life planning strategy for every aspect of the rest of the client’s life.

    There seems to be a broad consensus that these strategies go way beyond what the regulator actually wants to see, but it’s very difficult to find out if your network has genuinely been instructed that these are what they’ve been told that the regulator wants to see or if they’re gold plating everything to the nth degree in their own interests of self-protection.

    Whichever is the case, increasing numbers of members of the large and long established networks are voting with their feet and leaving to work in a less oppressive and unreasonably burdensome environment.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm