FSA refutes Fisher's TCF trail accusation
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The FSA has rejected Andrew Fisher’s claims that advisers using trail commission to offer an ongoing advice service to clients are breaching treating customers fairly principles.
In an interview with MoneyMarketing.co.uk earlier this week, Towry Law chief executive Andrew Fisher (pictured) argued it was in breach of TCF principles to keep advising clients while receiving trail commission from providers.
Source: Michael Walter/Troika
Fisher has been a vehement critic of commission but last week admitted his firm takes £6m in trail every year without offering ongoing advice.
He says: “The whole purpose of trail commission today, if it is not a deferred up-front commission, is to increase persistency. If someone is incentivised to keep a product with a client then that would be in breach of TCF principles.
“Clearly the industry has got it horribly wrong if they think trail commission is there to service clients. It is so wrong it is extraordinary.”
But an FSA spokesman says: “If a client is paying trail commission and is receiving further advice from that adviser I cannot see where a TCF breach would be. We would want to see clients in that situation receiving ongoing advice.”
Towry Law saw a pre-tax loss of £10.6m for the year ended December 31, 2008, plummeting from a profit of £812,000 in 2007. Fisher says the firm is set for a £20m profit for 2009.
In October, Towry bought the UK subsidiary of Edward Jones, which made a loss of £35m last year, for £1. Fisher says Edward Jones comes with capital adequacy reserves although he would not disclose the figures involved.
CandidMoney.com founder Justin Modray says: “The existence of trail commission should give advisers a financial incentive to continue looking after clients and it empowers clients by allowing them to take their custom (and trail commission) elsewhere if they feel their adviser is not providing satisfactory service.”
For more on the subject, see this week’s issue of Money Marketing.
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Readers' comments (43)
Anonymous | 18 Nov 2009 10:32 am
Sounds like the ultimate solution to the requirement of consumers for ongoing advice!
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Anonymous | 18 Nov 2009 11:04 am
At last Fisher's over-bearing 'holier-than-though' stance has been shown to be wrong.
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You must be joking | 18 Nov 2009 11:10 am
The "FSA Spokesman" gets my nomination for a Knighthood in the new year's honours list!
At last, some common sense!
Now all we want is for Twonky Law to be hauled over the coals for thiri slanted view on TCF - i.e. taking trail and doing nothing is better than taking trail and servicing - and for Fisher to be dismissed without delay.
Then "the pinks" will stop publishing this man's moronic comments!!!
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Anonymous | 18 Nov 2009 11:11 am
hahahahahahahahahahaha! stick that in your pipe and smoke it.
Oops perhaps I am a little harsh and unprofessional with that comment. Never mind, i'm making it anonymously.
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Peter Herd | 18 Nov 2009 11:12 am
Maybe Fisher would like to repay the 6 million is it is so wrong. Like a man that puts his money where his mouth is and standbys principles. Or is it he going to pocket the cash.
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ROD LEONARD | 18 Nov 2009 11:12 am
Mr Fisher needs to give up all his trail commission then, I would recomend any client of Towry Law to transfer their trail to an advisor who is prepared to give ongoing service and advise,. that would be TCF.
This whole RDR, TCF, CP121, Menue, Polorisation, has run its coarse, for crying out loud. If the FSA want rid of the true IFA, just admit it and let us all leave the profession and do something else.
IF IT AIN'T BROKEN DO NOT ATTEMPT TO MEND IT
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Jeff | 18 Nov 2009 11:13 am
Nice one FSA! (Never thought I would write that!)
Is there a book running on how long Fisher will last? If so, could I put £5 on Tuesday.
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Neil F Liversidge | 18 Nov 2009 11:13 am
Well, it's nice to see somebody at the FSA has some common sense. I think we can put Andy's last utterance down to a panic-induced spasm. Caught in a net of his own weaving, The Fish is thrashing about wildly, flailing his tail in every direction, but it's only a matter of time before he's landed and turned into sushi!
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Anonymous | 18 Nov 2009 11:13 am
Will he be required to pay back the £6 million for not giving on going advise.
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Garry Heath | 18 Nov 2009 11:14 am
In 1997 I hosted a providers conference which discussed amongst other things trail commission. In two contributions which followed each other. One provider rep declared that the commission was deferred initial the other was that it was a servicing fee.
Embarrassingly they were from the SAME provider!
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