View more on these topics

Commission – simple realities, practical solutions

So the next witch-hunt is to be on commission levels on personal investment business, including unit trusts and investment trusts.

But why? Ninety-nine per cent of unit trusts and investment trusts pay a straight 3 per cent initial commission,so where is the scope for commission bias in that?

Investment bonds are different, of course, and commission levels do vary. OK – why not just cap the commission at 4 per cent initial (reflecting the fact that they are more complicated products than unit trusts) with 0.5 per cent a year trail? Why should any review, as if one were needed, be any more complicated than that?

Occasionally, clients raise with us the issue of different commission levels between different investment bond providers. I tell them that higher available commission can be to their advantage because we (almost) always rebate everything in excess of 4 per cent to enhance the client&#39s investment. This is excellent for business because, as we all know, clients love a special deal.

But the Treasury seems unable to grasp such simple realities and practical solutions, preferring instead the lengthiest, most costly and most complicated strategy to tackle anything at all, in the typical fashion of civil servants on index-linked pay scales paid for by the rest of us. And who is this Myners fellow anyway?

Julian Stevens

Partner, WDS Independent Financial Advisers, Bristol

Recommended

Manchester offers 25 year fixed rate

Manchester Building Society is launching a 25 year residential mortgage with a fixed rate of 6.29 per cent for the life of the mortgage.The mortgage, available as repayment or interest only, is available for up to 80 per cent loan to value. It carries a £295 arrangement fee and early redemption charges of 3 per […]

Fund firms in 11th-hour bids to boost Isa sales

The UK&#39s biggest fund managers are adopting emergency tactics in a bid to buck current bear market sentiment and boost last-minute Isa sales. Threadneedle Investments is urging clients to invest in its cautious managed fund rather than waste their Isa allowance. It says it will then offer free switches into any of its other funds […]

Gerrard appoints intermediary sales head

Gerrard is appointing Mike Topham as head of its intermediary sales team, replacing Gordon Campbell who is retiring. Topham was previously sales director for the combined Cape Cure Sharp and Greig Middleton businesses prior to the name change to Gerrard.Gerrard front office managing director Chris Moorson says: “Mike&#39s previous experience in the IFA market made […]

Corporate bond from Lincoln

Lincoln Unit Trust Managers is launching its first corporate bond fund, to be managed by Goldman Sachs Asset Management. The product is designed to provide investors with regular income but also offers the option of reinvesting for growth. There is an introductory initial charge of 0.25 per cent until April 30 compared with the standard […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment