Ivan Massow has written to clients of his trail commission return service informing them the firm will keep 100 per cent of their future trail if they do not move away to another adviser.
Massow posted a closure notice on the firm’s website on Monday after less than two years due to escalating regulatory and professional indemnity costs.
The business was set up to return 80 per cent of the trail commission to clients and keep 20 per cent if they switch from their current adviser.
A note sent to clients of the service this week says: “We would like to inform you that Massow’s will no longer be able to rebate commission as of 19 August 2013. If you have paid us a joining fee, this amount will be refunded in full. If you are owed any money up until 19 August 2013, this amount will be repaid to you.”
The note then gave clients two options, either move to another advice firm or allow Massow’s to keep all future trail. It says: “You could do nothing – but we will not be able to rebate any commissions we receive, and will keep them. However, we will still show up as your servicing agent. This may be useful for people who get little or nothing back and quite simply can’t be bothered to move their affairs.”
At launch of the firm in 2011 Massow said: “The first priority of our advertising campaign is going to be education. Most people simply don’t know they’re paying these fees – not a single person I’ve asked knew of their existence.”
On its website, the firm said: “You probably haven’t heard of ’trail commissions’, but up to 1.5 per cent of the value of your investments each year could be paid out to your Independent Financial Adviser as commission. We will find this commission and pay 80 per cent of the full amount back to you. This means that on a typical pension we would send you more than £60,000 over the term of the policy.”