Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a649375

Sesame draws up approved product list to keep PI costs down

by Jun Merrett on Jan 08, 2013 at 13:18

Sesame draws up approved product list to keep PI costs down

Sesame Bankhall Group has beefed up its compliance procedures for independent advisers who write business off its newly drawn up approved product list in a bid to keep professional indemnity (PI) costs down.

The move, dubbed ‘Project Prism’ by Sesame chief executive George Higginson, is part of the network’s effort to keep a lid on PI costs and follows its decision to formalise an approved product list for independent advisers.

The network will check and have the power to block any sale of a product not on the list. It currently operates on a post-sale check process after the adviser has written business.

Speaking at the Sesame Bankhall Group 2013 Symposium, Higginson (pictured) said: 'We need to have a more robust process to ensure one person in our network doesn't go off and sell toxic products that the rest of us pay the price for. That costs all of us on our PI cover.

'We currently have an approved list of products. This will become a formal panel for those who want to remain independent in the network. You can go off panel, but there will be a robust pre-sale process so we know what's going on... And that's only fair to protect us all.'

The company also announced it had added provider Royal London to its restricted advice panels.

Sesame announced the launch of its restricted advice panels in late 2012 in five areas including investments and at-retirement. Providers on the panels include Aviva, Aegon, Zurich and Prudential.

Under the deal Scottish Life will provide pensions and at-retirement products and Bright Grey will offer personal and business protection products.

17 comments so far. Why not have your say?

Man in Black

Jan 08, 2013 at 14:12

Whilst I'm sure this is indeed done with the best of motives (keeping down PI costs for all advisers), it means brighter advisers being managed according to the needs of a distinct minority.

report this

W K Clark

Jan 08, 2013 at 15:17

Personally I thought Networks were there to serve the advisers, obviously I am wrong.

report this

Adam Grant

Jan 08, 2013 at 15:26

If you're going to have an approved panel, what's the point of claiming to be independent? Sure, you may be able to go "off panel" as suggested, but you can bet your bottom dollar that the "robust pre-sale process" will probably prevent you from doing so.

And in the new RDR/Independent/restricted world, shouldn't it be called "pre-advice process" as independents don't do selling,...

p.s. Why do Citywire use so many bad photographs and please can we stop with the pop-ups? I'm quite capable of looking to the right of the story for today's top headlines!

report this

Stewart Tomlinson

Jan 08, 2013 at 16:36

Burns-Anderson were doing exactly what Sesame propose until 2000, and what happened to B-A...............................................

report this

Simon Kershaw

Jan 08, 2013 at 17:08

@Adam Grant

I agree with you - pop ups worthlessly annoying.

report this

Keith Cobby

Jan 08, 2013 at 17:37

This looks like a 'multi-tie' to me and I would categorise these as financial sales advisers.

report this

Steve Young (Sense Network)

Jan 08, 2013 at 17:39

The clue is in the phrase "for those who want to remain independent...". Sesame members shoukd be very clear that their network is actually committed to restricted advice and has no desire or interest in making it easy for firms to be independent. Yet again, PI is used as an excuse for making IFA status more difficult - our experience is that an IFA network with a good claims record can secure high quality, inexpensive PI cover.

PS - the pop ups are really, really annoying

report this

Richard Wakem

Jan 08, 2013 at 17:58

pop ups are annoying

report this

Julian Stevens

Jan 08, 2013 at 18:15

Tenet has tried much the same, yet my PII premium this year is still very high. I've never had to make a claim, BTW.

I also find the pop-ups irritating.

report this


Jan 08, 2013 at 20:07

Let's see if we can make as many comments about the annoying Pop-Ups as we do those other minor irritations such as (Sir) Hector Sants, SJP, Towry etc !

report this

Peter B Hicks

Jan 08, 2013 at 22:58

I listened to the whole of Mr Higginson's speech, and did not feel this was any threat to the concept of independence. The approved list is regularly reviewed by a high quality professional team, and (crucially) is sufficiently broad to provide many different options for an adviser to choose from. So more of a menu than a set meal, if you will. Also, the real clue is in the phrase "toxic products". Going off panel for, say a well known corporate bond fund set up as UCITS in the UK managed by a highly regarded fund manager is not suggested to be a problem. However a pre-sale, or pre-advice, process is a sensible price to pay in order to avoid someone recommending a toxic product for which advisers who wouldn't touch them with a bargepole would end up having to share the eventual financial cost. Anyone who thinks the FSCS levy is unfair would find it hard to disagree with this point.

I disagree that PI was used as an excuse to make independence seem difficult - rather, it is given as a reason to try and prevent advisers from (albeit innocently and misguidedly) recommending rubbish. Hence the pre-sale process of ensuring another professional opinion before a recommendation goes ahead. It's not rocket science and makes perfect sense.

report this

Peter B Hicks

Jan 08, 2013 at 23:00

By the way, I agree with everbody else here on the pointlessness of pop-ups. Citywire PLEASE desist.

report this

Adam Smith

Jan 09, 2013 at 08:24

+1 against pop-ups. Re the actual story, I'm surprised this is viewed as novel for a network; if I had regulatory responsibility for what all the ARs did (and I've been there, as a CF10) this is the approach I would (did) adopt.

report this

Alan Lazenby via mobile

Jan 09, 2013 at 10:27

I think that Sesame have only had 200 advisers go restricted. If I went restricted then many of my clients could not be serviced to a high enough level. Restricted is fine for small investors. Why would wealthier clients wish to restrict their options? I believe that Sesame know which side their bread is buttered and will encompass both, if not they would suffer a huge exodus of IFAs. Out of many 1000's only 200 have chosen restricted and even if it reached a 1000 it's not enough to sustain the business if they asked all IFAs to leave.

The FSA will ensure the panel don't pay money to Sesame for being in it, as that would be the most obvious breach of trust with their advisers.

report this

Richard Hardy

Jan 10, 2013 at 08:33

I think by the time the shambles created by the FSA has bedded-in all advisers will be 'restricted' as there will be so few providers offering FSA regulated products!

report this

Richard Hardy

Jan 10, 2013 at 08:34

Everyone is right those pop-ups are irritating.

report this

Greg M

Feb 06, 2013 at 11:32

Pop ups - yes annoying.

I emailed Citywire and complained, and was told by a condescending idiot that I can always click to close them; and that they were there in response to 'customer feedback!'

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy

Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.

More about this article:



Lucky escape: when firms avoid FCA fines

by Jun Merrett, Michelle Abrego on Jul 24, 2014 at 15:31

Sorry, this link is not
quite ready yet