Discount broker and execution-only business Clubfinance is in discussions to acquire the client bank of Ivan Massow’s commission return business Paymemy.com/mission following the demise of the firm.
Clubfinance says it will be taking over the client bank and providing an alternative commission return service and is in discussions with Massow over what it will pay to take on the clients.
Clubfinance will be taking a higher fee than Massow did to provide the commission rebate service. Clubfinance will return 75 per cent of a client’s trail, and retain 25 per cent, while Massow’s service charged 20 per cent.
Clubfinance co-founder David Scrivens says: “Trail commission rebating as a stand-alone business is extremely difficult to make work, particularly if the rebate to investors is high. In the circumstances, Ivan and we believe this outcome is in the best interests of Paymemy.com’s clients.”
Massow says: “Unfortunately, running a stand-alone trail commission rebating service has proved to be unsustainable owing to growing regulatory and other costs, coupled with very tight profit margins.
“It was with a great deal of regret that we had to close the business but the numbers simply no longer added up and we were losing money every time we paid commissions to our clients.”
Last week, Ivan Massow told Money Marketing he faces personal losses of £200,000 as a result of the closure of the business.