The Association of Mortgage Intermediaries has been reluctantly dragged into the furore over Paymentshield’s decision to cease paying trail commission to retired advisers.
The AMI has been deluged with calls from brokers wanting information on how to join a new legal action group being set up to try to recover millions of pounds in compensation.
The group is being organised by former Paymentshield marketing director Gareth Riding, as first revealed by Money Marketing in November. He is still negotiating with no win, no fee law firms in London, Liverpool and Manchester to take on the cases.
One estimate has put the number of affected brokers at 30,000 as more advisers retire over time, with the current figure thought to be 1,500.
Riding’s group plans to launch a test case which will be used as the precedent for remaining cases if successful.
Paymentshield insists its terms and conditions allow it to stop paying trail to advisers that are no longer regul-ated despite Money Marketing last week printing promotional literature from the firm that promised commission for the life of the policy.
AMI associate director Rob Griffiths says the trade body will not get involved in the dispute although it will provide advice for concerned advisers and is likely to refer them to Riding.
Mortgage Portfolio Service mortgage planner Simon Chalk says: “Paymentshield’s statement that advisers should have sold their businesses is incredibly naive.”