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Ivan Massow firm to keep 100% of trail if clients don’t move

Money Advice Service

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.”

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Comments

There are 38 comments at the moment, we would love to hear your opinion too.

  1. Who didn’t see this one coming? This was purely a smash and grab of commission from day one. The fact he set the company up criticising what he will now be doing 2 years later tells you everything you need to know.

  2. Someone should launch a website where consumers can reclaim their trail commission from fly-by-night operators that promised to rebate commission to them and then didn’t. You could give it a catchy URL like iwantsmi.ne/barrowboy (Niger addresses are pretty cheap these days). Hire an ex-FCA member looking for a consultancy gig (say £20,000 for two weeks of work) and I’m sure those regulation problems could be sorted.

    Alternatively you could have some sort of service where in exchange for the ongoing commission paid, you could give advice on the punter’s products and whether they are still suitable for their needs. No, forget I said anything, that’s a stupid idea.

  3. Now that’s outrageous behaviour.

    How much of this whole farce was premeditated? A classic case of suckering people in, then totally changing the goalposts. And relying on the inertia that he was apparently so against as a way for him to earn money for nothing going forward.

    People like this are the reason why trail commission is being looked at so closely – yet when used properly is an efficient and fair way for clients to pay for ongoing service.

    A total disgrace. I hope Paul Lewis is ashamed of himself for helping promote this charade.

  4. incompetent regulators 21st August 2013 at 12:06 pm

    ooooooooohhhhh you’ve smudged your lipstick Ivan!

  5. What a *****y HYPOCRITE!
    Doing what he says other advisers do anyway ie pick up trail for nothing!

    No wonder with morals like this he failed at everything he does!

    Doesn’t stop him trying though! Suppose THAT’S HOW HE MADE & LOST A FORTUNE!

  6. TCF outcome 5?

    …. the associated service is ….. as they have been led to expect.

  7. Purposely setting up and closing down a company in order to retain the trail?

    Nah, that’d be anal.

  8. I have never helped promote Massow’s trail rebate service as this nameless IFA says. I covered it once as a news story on Money Box with some scepticism http://goo.gl/PSlxrQ

  9. I hope he’s written to all its clients and told them. and that means both them.

    Another client’s champion bites the dust!

  10. Anyone got any idea how many clients This firm has and how much trail it was in receipt of (before rebates were given)? Was rebating commission on pensions not a big no no or am I confusing that with something else? WOuld be interested to know. It really is shameful and the FCA should fine him and close the firm forthwith. He is a disgarce to this industry in my own humble view

  11. Ivan Massow. In good company with Trevor Deaves, Roger Levitt, Bernie Madoff and (if you can remember) Bernie Cornfeld.

  12. Sorry Paul, but by covering this serial business failures latest wheeze, you DID help promote him. Massow lives on the oxygen of publicity.

    And your more general attacks on trail commission…which work well between good advisors and informed clients….helped create a climate for this type of scam to be attempted.

  13. Nice to see Paul Lewis keeps a close eye on the trade press – now we know where he researches his stories!
    I thought this publication/website was for qualified financial services professionals, not BBC journalists.

  14. I’m confused, to be paid trail the firm has to be authorised (right?), all authorised firms need to have suitable PI insurance in place, Massow says PI insurance is too expensive. How does that circle get squared?

  15. will paul lewis appear on moneybox this weekend, warning consumers massow will be collecting their money with nothing in return?

  16. Why do all the critics of Paul Lewis do so anonymously?

  17. Oh for heaven’s sake stop knocking Paul Lewis.

    Overall he does a pretty decent job and this harping is hardly good PR for IFAs.

    I wonder where some of you keep your brains. Knocking influential commentators won’t exactly endear you.

  18. Lewis’ interview with Massow was, in the main, very well-balanced and sceptical, as he says. Unfortunately the lead-in was less so.

    “It’s called “trail” commission and is one of the industry’s best kept secrets – typically around 0.5% a year, but can be three times that much, and over the years it can reduce the value of your investment by thousands of pounds” – this is, according to the transcript, all coming from the mouth of Lewis, the voice of the BBC, not Massow’s.

    All of it is highly dubious (“best-kept secret”, up to 1.5%) or missing the point (by how much does not taking advice and leaving the whole fund in cash reduce the value of a pension over 20-30 years?), and sounds like it came straight off Massow’s website.

    And the lead-in is probably the bit that most people remember.

  19. Note to all life offices ‘If you have Mr Massow’s firm as the servicing agent and the firm is no longer authorised or regulated by the FCA do you not have a need to switch off the trail commission?’

  20. @Harry

    That’s why they do so anonymously!

  21. Paul Lewis

    I have to agree with the unnamed advisers in the other article and Harry you are wrong if we don’t give feedback how can the correct his behaviour. (I live in hope).

    By giving the company air time you are effectively promoting that company thus the reasons why so many independent financial advisers have problems when you give airtime to unauthorised sources of information like Martin Lewis. How many times to you have independent financial advisers giving opinions on pensions, ISA and other subjects compared to unauthorised sources of information from so-called financial journalist..

    Martin Lewis, could also state that he hasn’t promoted this particular firm and to my knowledge that is true BUT he has promoted commission rebate as a simple search of his website will illustrate. There are even a couple of links to firms that offer this service.

    http://www.moneysavingexpert.com/savings/bigger-pensions

    The FCA may say that he is doing nothing wrong which many IFA’s question but who pays the compensation for recommendations or perceived guidance by journalists when you get it wrong.

    The answer to that question is us registered IFA’s, as we are the ones who pick up the tab via increased regulatory costs. After all unregistered journalists and unauthorised sources of information pay nothing into the system or minimum amounts in respects to moneysavingexpert.

    I think both yourself and Martin Lewis need a bit of a reality check on how tough it is to operate in the modern financial services industry and how expensive it is to operate a firm. When I listen to either of you on the news or on money programme I don’t see the benefits of a IFA been mentioned to consumers, in fact we are often per trade as money grabbing sharks that diddle people out of their pension – that is the continual diet the consumer is given, back to up by the Daily Mail.

    SCEPTICISM, I’m afraid is often lost in translation particularly when air times given to a scheme that was obviously going to end up being closed down and pocketing 100% of the fees. I wonder how much he managed to collect.

    I also hope that the regulator fines him for not treating clients fairly as this is obviously a breach of those rules.

    When is the FSA going to take action against unauthorised sources of information and clampdown on obvious breaches of marketing rules.

    WILL YOU BE MAKING AN APOLOGY TO THE LISTENERS OF MONEY BOX for those clients that took up Mr Massow offer as they are now stuck with a firm with no access to advice. It is more than unlikely that any IFA will be willing to take over the servicing rights for that client to provide high-level financial advice particularly if any fund switches are recommended due to the fact that trail commission will probably be turned off as under RDR rules that counts as a disturbance event.

    The “Dirty Little Secret of Financial Services” as you put it, is that many IFA’s are having their income is turned off and the insurance companies are pocketing those fees for themselves leaving the IFA high and dry.

  22. Bit of a Dick Turpin then ?
    Paul did you check out Ivans past record before giving him an excellent platform ?
    Just asking.

  23. What a big con this turned out to be.

    As per a few comments on here I bet we here nothing from those praising him when he came up with this idea.

  24. incompetent regulators 21st August 2013 at 4:05 pm

    @Paul Lewis

    Your programme is typical BBC rubbish and biased as it always assumes the consumer is right.

    It’s about time they burned the place down.

  25. Are there any advisers out there who would welcome this type of client?

  26. @ incompetent regulators

    A touch harsh!

    I think Paul Lewis does a fairly decent job in educating the public at large. A task which, arguably, the FCA should be doing.

    What needs to be done though is a more balanced view to promote the use of IFA’s where necessary.

    I fear that there are many out there who would take what Mr Lewis says as gospel and may make the wrong choices.

  27. @Pension man
    that is what we pay MAS for.

  28. So, “incompetent regulators” it is the fault of Paul Lewis/BBC/[insert other party to blame that the financial service industry has been indiscriminate in its shafting of consumers?

    So, it wasn’t the regulator’s fault, then?

    If consumers didn’t need protection, there wouldn’t a need for a regulator. And there is. Really, for all its faults – and in the past they have been legion – it really was needed.

    And anonymous or not, that kind of comment could result in a cavity search, given the over-reaction of some police forces to certain social media subjects.

  29. incompetent regulators 21st August 2013 at 5:27 pm

    @PSA Floyd

    Excuse me, I think my post name says enough about the regulators.

    The point about the Paul Lewis show, is that most media that is now delivered is dumbed down to the lowest common denominator and is so PC it’s getting on most peoples’ nerves. And unfortunately, we the tax payer is pay for the BBC license which is yet another tax for a broadcasting company that pump out biased propaganda which is not based on facts, but fiction mostly. I once heard the show whereby a guest totally misrepresented what people were doing with SIPPS and got his facts 100%^ wrong. When I complained about the misleading statements, the BBC brushed it under the carpet. They have tremendous influence and unless facts are right they need to be punished just like IFAs.

    And unfortunately the electorate is politically illiterate and so the BBC which was once a GREAT BRITISH ESTABLISHMENT is non other full of it’s own biased spin.

    As a good businessman I look after my clients better than most, but I don’t treat them like idiots. I educate them to help them make decisions. Not put silly ideas in their heads. The BBC is like the regulator and politicians, full of their own self preservation and no one else’s. They have their own little favourites and Lewis is one of them. I’m off to be sick now!

  30. I notice that the moderator declined to post my earlier comments which compared Mr Massow to other well-known insalubrious members of the financial services arena. It seems that even this worthy publication fears an insolvent failure.

  31. I would encourage a complaint to the FCA from the IFA community regarding this ‘Chancer’. What he has done and proposes to do is disgusting at best…! and Paul, put this right on Saturdays program.

  32. I thought only FSA regulated entities could keep trail going to them – or am I being misled

  33. Looking forward to Paul Lewis apologising on this week’s Money box – I will not hold my breath.

  34. Im not an FA .. i’d much rather take paul lewis’s word than you lot. As far as i can see your all a bunch of crooks living high on the hog off the rest of us.

  35. @ Anonymous | 22 Aug 2013 3:47 pm

    Ah…trolling behind the veil of anonimity!

    I am suprised that the moderators let that one through!

  36. I seem to remember hearing Paul Lewis on the radio and whilst the actual interview may have been reasonable balanced, the lead in ga e a different impression, so once again. I am in agreement with Peter Herd.

  37. I’m not quite sure why MM permits any anonymous postings as this just encourages diatribe.

    Mr Lewis’ comment, from a journalist, can only be described as disingenuous, though I do sympathise with his adviser scepticism when his awareness of advisers can be shaped by the postings here by advisers. There can be no surprise to anyone why there tends to be a jaded view of that community.

    I have noted with interest, however, that a) there’s no reporting in the nationals, and b) he is currently not being referred to as ‘the millionaire Ivan Massow’.

    Lastly, any regualted reader should cut & paste the text stating he intends to withhold all money from clients and email it to

    whistle@fca.org.uk

    Ivan doesn’t appear to be up to speed with RDR, nor can he take on business on such an explicit financial basis on which he reneges to his sole financial benefit. There’s a word for that.

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