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Nic Cicutti: The cost of Apfa’s advice umbrella

If everything I read – and the people I speak to are correct – the planned rebrand from Aifa to the Association of Professional Financial Advisers could turn out to be a stunning commercial success.

Not only will the new Apfa be able to retain many of its existing IFA members, not to mention those who move to providing restricted advice, it also raises the possibility of an influx from sections of the financial services community who were previously not eligible to join.

Many of the new recruits will relish the opportunity of using a logo that states they are “professional financial advisers”, validating their current role in an instant.

Among them, it is rumoured, is St James’s Place. Over the years, in the pages of Money Marketing and many different forums, I have read many interesting comments about the company and its “partners”.

We all know what they are and I have no intention of repeating them here, other than to say it is ironic that SJP may soon be consorting with many of the UK’s genuine IFAs, some of whom have always been deeply condemnatory about that company’s sale practices.

Still, perhaps Alan Lakey, who – one of the most astonishing volte-faces of the past few years – seems set not just to rejoin Aifa/Apfa but stand for its council, may find some helpful sales techniques to assist with his RDR-battered business.

I won’t say any more about that either, other than to humbly suggest – notwithstanding Harry Katz’s initial praise for Alan on Money Marketing’s website – that the replacement of one for the other is not a straight swap.

For me, what this all brings into relief is the issue of selling in and of itself. Over the past 20 years or more of writing about the financial services industry, that is the one word to constantly crop up among the vast majority of IFAs I have spoken to, or whose comments I have read.

Here’s my dilemma. On the one hand, the experience of being sold to makes me uncomfortable, in a physical sense. If I sense someone is doing that to me all I want to do is run out of whatever room I’m in – even if it’s in my own property. As in, you can keep the house, I’m out of here.

Worse, if someone is pushy about it I literally start to sweat and hyperventilate. Mentally, I’m swearing at the person opposite me, but some excessive sense of politeness prevents me from actually doing so. They’re probably thinking how well we are getting on, albeit they have spotted patches under my armpits, while I’m wondering how much more of this torture I have to put up with.

And yet, here’s the rub, I fully accept that some form of “selling” needs to take place before most of us pay any attention to our finances. There are all sorts of cultural, social and even educational reasons for this, not to mention previous experiences with financial advisers that may not have gone well.

The ultimate goal ought always to have a fully-engaged, confident, inquisitive relationship with an IFA. Most advisers would prefer that too, I know. But in the short term, that isn’t always possible – hence the need for some sales technique to be applied from time to time.

All financial advisers understand this. Many are proud of the skills they have learned and honed over the years. But there is “selling” and “hard selling”.

A really good IFA will read the situation perfectly. He or she knows the individual and knows when to stop, when a suggestion or a certain turn of phrase works better than another, or how to prioritise among various issues they want their client to deal with, or when to simply plant an idea and leave it to germinate.

A truly great adviser will help create the confident and inquisitive relationship I described earlier. In my own personal experience over the years, I have been blessed with two advisers who had that skill. They were like Zen masters in their professional approach.

Sadly, there are lots of IFAs who can’t manage it. Despite their current designation, they were always salespeople and remain more comfortable in that role. They’ve learnt every step of the sales process. They know how to understand client’s fears and to overcome them.

They understand and can apply every possible method of closing a sale – from the “thermometer close” to the “opportunity cost close”, not forgetting the “shame close”. They will do well, have lots of clients, earn buckets of money. But at the end of the day they’re primarily salespeople, not primarily IFAs.

The overwhelming majority of IFAs are somewhere between both extremes. Some advise but earn a living from the sale of a product, which has always struck me as slightly contradictory, but that’s just me. Others sell advice. A few are in the lucky position of being able to charge for advice they don’t need to sell, because people come to them for it.

In a few months’ time, once the RDR comes in, all that will change. Or maybe none of it will: genuine advisers will still advise and hard salespeople will sell harder. What they’ll all be able to do is rub shoulders under the Apfa umbrella, without distinction. How nice.

Nic Cicutti can be contacted at


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. I consider criticism from Nic as akin to praise from people whose opinions I value. Thank you.

  2. The writing has been on the wall for independence since the demolition of polarisation.

    RDR is a further nail in that coffin.

    AIFA was a dead man walking and totally inept in EVERY RESPECT.

    APFA is a good thing IF it means that this industry gets the voice it deserves at LONG last. Alan Lakey is a force for good in that regard. Lets be honest that regard is the most important regard moving forward. That is the reason why Alan has been put forward and that reason alone !!!

    By the way Nic no sales = no distribution

  3. Everyday new and better reasons for joining IFAcentre!

  4. I’m confused. Nic, it seems to me you are saying there are advisers, salespeople and many in between at the moment within AIFA….

    And there will be advisers, salespeople and many in between post RDR within APFA…

    Surely Nic, your issue is about the admission to APFA of non-whole of market, tied advisers?

    Prior to RDR I don’t recall you (or anyone for that matter) ever calling for the definition of independence to be based on a range of products rather than not being tied. But now that the FSA have adopted this new definition it appears to the the holy grail and noses up to anyone who isn’t…

  5. @ Alan: only “akin”?

  6. At least Alan lakey has got a pair balls and is not afraid to stand up for what he believes. If he gets elected he would be more affective at pulling ifa together and getting some results than the current bags of wind in charge.

  7. Get-your-wallet-out 15th October 2012 at 3:40 pm

    Well if Nic wants the IFA service he describes, it is now going to cost him a lot of money – and most ordinary people who don’t have Nic’s ‘sophistication’ won’t get out thier check book when you say, Ok you need to invest £100 a month into this and by the way our fee is £1500 or whatever.

    Advice at a cost – and the cost is going to be the millions who fail to seek advice and end up at the mercy of the welfare state and the extra strain that will place on the country’s finances.

    Not to mention the cost of advice not being available too many as a lot of advisers will have exited the profession due to the rising costs brought on by RDR.

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