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Nic Cicutti: Massow's trail deal leaves me cold

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Here is a confession for you - I am a massive bargain-hunter. I regularly spend many happy hours online, disproportionately far more than any saving I might make, to shave a few quid off the cost of our household’s potential purchases.

Just to give you an example, at the back of my garage are a couple of hundred jars of Kenco, our favourite instant coffee, a bulk buy which I estimate will save us an earth-shattering £2 a week over the next two years.

Even more bonkers is my purchase of 1,400 cans of half-price dog food the year before last. My reasoning was that by the time they were used up, I would be cutting the dog food bill by several hundred pounds over that period.

Happily, I am blessed with an understanding spouse prepared to humour my madness. When I informed her what I had done, she told me it was fine, as long as I was prepared to eat all the remaining cans myself in the event of anything happening to the dogs. I have not had to do so, yet.

Given my embarrassing proclivities on the family shopping front, you might think I would be hugely excited at the prospect of someone entering the financial services market with a money-saving proposition paymemy. com/mission (nifty name) - that offers to return to consumers most of the unnecessary trail charges they pay each year.

As readers of Money Marketing will have noted, its founder and chief executive Ivan Massow is proposing to hand back 80 per cent of trail to punters who switch their investments to his new firm.

In fact, Massow’s new venture leaves me completely cold. Don’t get me wrong, I am totally with the FSA in terms of its argument that trail commission is a payment for an ongoing service that should be provided by an adviser to his or her client.

I have no problem with the argument that people often pay trail commission for a service they mostly do not receive.

What I find more interesting is Massow’s business reinventions, from niche IFA catering to the gay market to becoming an agent for Zurich, a relationship which collapsed in acrimony.

Last year, Massow was named as managing director of a price comparison site, CompareForGood, which promised to pay a large slice of its commission earnings to Oxfam.

Yet anyone searching for CompareForGood will now only find a link to BeatThatQuote, the original site that was meant to provide the white-label comparison on service on Oxfam’s behalf.

As for, what is disappointing is the fact that if you read the Faqs on the site you will notice there is little mention of any serious ongoing service to clients if they switch their existing assets. Almost every question relates to how you can move your money and when you can expect to be paid and when.

If you want advice in relation to your investments, whether future or existing ones, you will have to go to another adviser for it - who presumably will not mind not receiving trail commission because the up-front fee they charge will be ample reward for their services.

Massow has told the media that he is not targeting existing IFAs’ clients, only orphans who no longer have an adviser but those attracted are likely to be both.

What appears to be saying is because so many IFAs use trail as a way of receiving ongoing payment without delivering any service for that money, then it might as well do the same itself. In other words, let’s accept the status quo rather than force advisers to do better.

But that is not the issue. What matters is that for too many years, IFAs have allowed themselves to be sucked into a relationship with their clients where the issue of remuneration - what they are paid and the service they will provide in return - has not been properly discussed.

Nic Cicutti can be contacted at


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Readers' comments (36)

  • Nic, you're so Moneysupermarket...

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  • Dear Nic Cicutti

    Just to be clear, we’re not trying to take work away from quality IFAs. We’re simply helping the 10 million people orphaned by RDR (or who get no service from their existing IFAs), get some value from their trail commission. This commission is often going nowhere (or to speculators who purchased the book when the IFA retired). I’ll say this slowly Nic, these clients currently get NOTHING for their money; so this is a great deal.

    Not only do we locate and rebate 80% of everything we find to the client (in itself not an inconsiderable task and with high acquisition/marketing fees), but for our 20% share, we also:

    1. Do most of the things a standard servicing agent does; but better because we allow the client to manage their change of address details etc online.
    2. Manage trust accounts, including free client money transfer systems which allow them to pay their money anywhere.
    3. Provide an online client portfolio and status tracking system.
    4. Manually collate and reconcile commission payments (because the insurers are still paper based on the whole); keeping clients updated every step of the way.
    5. Provide a free ‘technical advice’ division for policy queries.
    6. Offer a comprehensive introduction service to fee based advisers for people who require additional advice.

    It amazes me to think that you can’t see how much more we do for our trail commission at only 20% of the price of normal IFAs. More than that Nic, it’s upsetting that you simply can’t embracing large scale reforming enterprises like rather than simply feathering your own PR bed to frustrate positive action. It’s exactly because of clever ‘nay sayers’ like you, dressed as modernisers, that the industry has remained in a dark and unethical place which has repeatedly required outside regulation and policing. is just another alternative for clients who don’t have or want a relationship with a traditional IFA. We’ve tried to keep it simple and clients are responding well with thousands of enquires within our first few days.

    Kind regards,

    Ivan Massow

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  • I hear the price of manure is rising Nic.
    You probably have a big enough supply without adding to the crap stored in your garage.

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  • This could end up one of the most pleasurable discussions/arguments I've ever read if Nic and Ivan end up having a public spat!
    Fight, fight, fight.......

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  • Instant coffee. Why does that not surprise me?

    The price of everything and the value of nothing!

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  • 6. Offer a comprehensive introduction service to fee based advisers for people who require additional advice.

    Will Massow disclose how much he will be charging the new adviser, in introducer fees?

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  • I have to say Ivan's service is well judged in terms of public opinion, and in all honesty, it is difficult to defend taking trail income where literally nothing is being done to earn it. So it's a good idea to offer this service and I am sure it will generate lots of applicants in the early days.

    It will however fail in the longer term because -

    1. The saintly tone Ivan has adopted is irritating to a lot of influential people in the industry with deep pockets. I expect issues will crop up with the FSA/HMRC and others in due course as pressure is brought to bear.

    2. There is no way of protecting the income stream as the business grows. It is easy and cheap to set up a 90 or 95 or 98% rebate service once some other fool has done all the leg work of identifying the trail income and setting it all up in a tidy way. Clients cannot be tied in and by definition are hardly likely to be 'loyal' to Ivan's business. So will be with us very soon.

    3. The admin implications are appalling. Ivan says he has had thousands of enquiries in a week, and there will be thousands more next week. So the task of ringing various defunct, incompetent non responsive life companies starts and that is truly scary. How many times in a day can a person be told that 'we don't use e mail...'? or 'our response time is four weeks'?

    4. Ivan is running it. Everything else he has done has gone t*ts up and once it collapses, the policies form part of the assets of the business in receivership and can't be stripped away without permission from the receiver.

    This may well provide considerable entertainment over the next 12 months. Hope so, it is more fun than watching the Eurozone implode.

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  • How can you comment of the finer points of Financial Services and drink Instant Coffee ? Is that what you call an Oxymoron? A bit of class please.

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  • In life, take any 10 people in the same boat and put a relevant idea to them. Statistically - 3 will say YES to whatever you say, regardless. 3 will never agree and the rest can be swayed either way.

    Ivan's model, will potentially attract 70% of people. The other 30% will stick to what they want to like and know.

    Lets face it, IFA's are trembling in fear of Ivan's model. However, the solution is so clear, its crazy - MATCH MASSOWS DEAL - or risk losing a client right? I believe that a vast majority of clients will want advice from their long term adviser.

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  • Nic, please cease perpetuating the myth that trail commission automatically imposes a servcing requirement on advisers.

    Whether it does or doesn't will be down to the terms of businessor client agreement used by the adviser and agreed at the outset with the client.

    Consider this true scenario. A client had been sold an AXA investment bond by her building society (tied, of course) and they took close to 8% upfront commission with no ongoing trail. The building society has no ongoing legal requirement to offer her ongoing advice.

    Scenario 2 ; I meet a client and am able to take up to 7% on a similar bond or some other sum such as 3% initial and 0.50% trail. If I take the 7% (which I don't) I have no ongoing advice requirement. Just because I might take 3% and take 0.50% or 0.25% trail doe snot automatically mean that I should give ongoing advice.

    You are confusing the income taken with the client agreement and they can and usually are disparate.

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