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Advisers&#39 anger at LeggMason moves to cut commission

LeggMason Investors has been slammed by IFAs for direct-mailing their clients with det-ails on new products and cutting out their commission.

IFAs says LeggMason has provided Johnson Fry Pep planholders with specific maturity details while giving IFAs only generic sample letters. LeggMason took over Johnson Fry in December 1999.

Investors will pay no initial charge if they transfer their maturing investment into a LeggMason unit trust, cutting out IFA commission. The company says it will pay 2.5 per cent initial commission only if IFA clients request it. The commission will deducted from the client&#39s initial investment.

IFAs are demanding that LeggMason remunerates initial commission from any res-ulting business with their clients. The company says it will continue to pay renewal commission to IFAs even if clients do not seek advice.

Stuart & Co Financial Planning partner Colin Barrett says: “It is disappointing that the situation from this mailshot will go unaltered. They asserted it would be an administration nightmare, which is a bit thin.”

LeggMason product director Brett Greatrex says: “If clients reinvest, the business is cred-ited to the IFA regardless of whether there has been contact between the client and the adviser and renewal commission is paid. We have undertaken to amend the letter so IFAs do not feel embarrassed about the initial commission issue.”

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