Ivan Massow says he “regrets terribly” telling clients he would keep 100 per cent of trail following the demise of his trail commission return business Paymemy.com/mission.
Speaking to the BBC’s Money Box programme at the weekend, Massow again cited escalating professional indemnity costs as the reason for the service’s closure, but also admitted the business did not secure enough clients.
Presenter Paul Lewis asked what now happens to Massow’s former clients, and questioned an initial email sent to clients announcing the closure which said the firm would keep 100 per cent of future trail if clients do not move to another adviser.
Massow told the programme: “I regret that wording terribly now. I wanted to enforce the urgency, and the reality that the business was going to close. I will not keep 100 per cent, I will not keep any of it, it will just get lost in the mire of a closing business. That letter has been superceded now. A company called Club Finance has very happily come and negotiated with us to take over our client bank. They already do commission rebates, and so they will effectively be stepping into our shoes.”
He also admitted that Club Finance will be taking a higher fee than Massow did to provide the commission rebate service. Club Finance will return 75 per cent of a client’s trail, and retain 25 per cent, while Massow’s service charged 20 per cent.
Massow said: “They take a 25 per cent fee, that is what they feel they need to do to survive. Clients do not have to go to them, they can find someone else that offers a similar service to us. We have been careful not to allow this to affect clients. We have rebated all the fees that we took from them, and I think we have behaved honourably.”
Lewis noted many advisers were unlikely to agree with this statement, and pointed to online comments on Money Marketing showing “the depth of hostility and anger towards Ivan Massow and his business.”
Essential IFA managing director Peter Herd also appeared on the programme, saying clients needed to focus not just on what they are being charged, but the level of service they are getting for those charges. Lewis argued Massow would not have attracted the clients he did if those people felt they were getting a service they valued.
Herd said: “Some clients are service hungry and want regular annual reviews, and there are others who would rather come in once every two years. It depends on the clients’ needs. My message to those clients who are being moved to Club Finance is to think about what they are paying for, and if this is adequate for their needs. If not, I would encourage them to seek out a decent IFA.”
Another adviser, Simon Kershaw, also contacted Money Box. He emailed the programme saying he had been an IFA for 18 years, and had “never knowingly lost a good client, even to ’commission-harvesting’ ventures such as Mr Massow’s.”