Many years ago, if for any reason any TV programme wanted a representative of the advertising industry for an interview, panel discussion or whatever, there was only one go-to guy in adland – the founder and then-boss of the Allen Brady & Marsh agency, Peter Marsh. Whenever he turned up on Nationwide or The Money Programme or whatever, we all cringed. Marsh was a stereotypical adman right out of central casting, with coiffed hair, heavy gold jewellery and a fast-talking, over-excitable style: how much happier we’d have been to be represented by that lovely urbane David Abbott (recently RIP).
I can’t help thinking, or maybe hoping, that financial advisers will now be feeling much the same about the new self-appointed role of former trade body leader Garry Heath and his new initiative The Heath Report (www.theheathreport.com).
Heath is in every sense of the phrase an industry heavyweight, so I write this blog with due trepidation. But I have to say that the sound I hear from his website is the sound of a dangerous, furiously angry and totally out-of-touch dinosaur roaring with uncomprehending rage as it slowly subsides into the swamp.
Maybe I shouldn’t comment on this, but I have to say first of all that I can’t ever remember reading a website with more typos and grammatical errors in it. There’s even a typo in the main navigation. And in the name of the initiative that provides its subject-matter (he calls it “Retail Distribution,” leaving out the word “Review.”) You can judge the overall level of attention to detail from the last sentence on the home page, which tells us that his report is ” expected to be issue its first section in July with the final part issues in November 2014.”
The typos may be the equivalent of Peter Marsh’s horrible jewellery, but really it’s the content of Heath’s initiative which infuriates. It does this in two main ways.
First, there’s the dishonesty. He claims, repeatedly, that the purpose of the report is to “give a voice” to clients who have suffered from unintended consequences of the RDR – in particular, who have been “orphaned” as a result of their adviser choosing to leave the market. However, in what he has to say about his methodology, there’s no evidence that he intends to engage with clients at all – his questionnaire is addressed exclusively to advisers. And even in the list of seven questions he says he intends to answer, only one could be said to represent the “voice of the client” – he asks “what attitude to clients have to RDR?” although he gives no indication as to how he intends to find out.
But what’s really dreadful about his account of his initiative is its total, utter, hostility to every single aspect of the RDR, and its absolute conviction that all of its consequences have been entirely, 100% negative. He’ll stop at nothing to maintain this position, twisting facts and slanting evidence to an extent that would be appalling if it wasn’t so ludicrous.
To quote a few examples of his forms of words:
– Commenting on one of the most positively-received elements of the RDR, Heath accuses the regulator of “arbitrarily injecting new qualifications.”
– Having been part of the IFA claque that heaped abuse and scorn on low-quality bank advisers for as long as I can remember, Heath now sheds crocodile tears at the scaling-back of many bank adviser forces – banks realised that RDR “compromised their offering and as a result most have drastically cut their adviser forces.”
– clients who no longer have access to these formerly-despicable sales-driven advisers are left “victims of the unforeseen effects of RDR.”
– when it comes to the “losers” from the RDR process, Heath claims that “The biggest group are those clients who no longer have an adviser – known in industry-speak as “orphans”. There may be as many as 10m of these.” This is nonsense. Leaving aside the fact that many of these advisers were a commission-driven disgrace to the industry, very few of the clients concerned will have had any kind of ongoing relationship with them To clients, the huge majority of the advisers who have left the industry will be some dimly-remembered hard-sell product-pusher who flogged them an ISA (or more likely an investment bond paying 7% upfront) a decade ago.
– On the same aspect, Heath claims he will investigate what will happen after January 2016 when “when many advisers who are currently living on servicing their existing trail commission clients lose that potential income.” The reality is that the small minority who actually are “living on servicing their existing trail commission clients” will have few, if any, problems: they will be easily able to justify moving to a similar ongoing adviser charge, paid out of the product in just the same way that trail commission is now. The very large number who will have a problem are the many who are actually living on not servicing their trail commission clients, in other words taking their 50 or 100 or even 150 basis points each year in return for doing precisely fuck all. They will not be permitted to keep on doing this, and if there is one consequence of the RDR that’s to be 100% applauded from a client’s point of view that’s it.
I could go on, but I’d get too angry and you’d start getting bored. (What do I mean, start?) And in any case, Heath’s website includes a questionnaire for financial advisers to fill in with evidence that supports his opinions (the first question, by the way, has five typos in it), but I hope and actually suspect that despite the PR coverage he’s getting, relatively few advisers will choose to do so.
It seems to me that there are two reasons why the very large majority of advisers will decide not to join the Heathosaurus’s last stand in that nasty sticky swamp. For one thing, even by the standards of the many advisers who remain pretty hostile to the whole RDR thing, Heath’s views are too extreme: those who’d happily sign up to half of what he’s saying would feel distinctly uncomfortable about the other half.
But for another thing, they’ll note that Heath intends to use the “evidence” gathered in his report to kick off a lobbying effort focusing on the FCA itself and the Treasury Select Committee. And surely even the most RDR-hostile adviser can see that Heath’s utterly rejectionist approach, complete with confrontational language, false claims and twisted evidence, is absolutely no way at all to achieve any kind of positive engagement.
For proof, just look at the effect it’s had on me. I’m neither regulator nor politician, and I do think there’s room for improvement in the post-RDR advice world. But The Heath Report has got my back up big time.