They are right in that Christians should live holy lives, but they are wrong that it has anything to do with our justification before God. It is the lack of teaching on repentance that opens the door for the cults. If our Christian testimony is to have any value there must be difference between the saved and the lost. They need to understand that salvation means something. Jesus died on the cross for a purpose.
Salvation does make a difference.
The security that is in Christ is not for everyone who professes to know Him. Simply making a profession of faith or praying a prayer is not enough. This reaches the point of saying that everyone who claims to be a Christian must be accepted as one. I believe that the Bible teaches we are to examine the fruit of a professing Christian and, if there is no good fruit, to assume that person to be lost. This is, by far, the safest position.