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Ivan Massow shuts down trail commission return firm

Ivan Massow

Former IFA Ivan Massow has closed down his trail commission return business after less than two years due to escalating regulatory and professional indemnity costs.

Massow launched the proposition in September 2011 which pledged to return the majority of trail commission clients were paying if they switch from their current adviser.

Massow said the business would return 80 per cent of the trail commission and keep 20 per cent itself and targeted clients who were not receiving any ongoing advice.

Speaking to the Independent at launch, 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.”

However, a new note on the firm’s website, posted yesterday, says: “As of Monday 19 August 2013, Massow’s will no longer be offering a commission recovery service to customers. This is due to the escalating costs of FCA regulatory fees, levies, and the costs of PI insurance which is mandatory (even though there is no PI liability to companies like ours as we do not provide regulated services). 

“In brief, this means we now make a loss every time we pay commission back to a customer because the FCA class it as regulated income received by us, rather than the unregulated income rebated to the customer which it actually is.”


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There are 18 comments at the moment, we would love to hear your opinion too.

  1. Well at least Ivan is 100% consistent at something.

  2. This was always a disaster waiting to happen

  3. incompetent regulators 20th August 2013 at 11:57 am

    A man will do as he has done and will be as he’s been!

    Are we surprised?

  4. Father O'Blivion 20th August 2013 at 11:58 am

    The king of failure.

    No backdoor methods for him.

  5. Oh dear *laughs uncontrollably* *deep breath* *laughs uncontrollably again*

  6. There never was masses of trail fees being paid by clients in pensions. As a % of cases that we review there is a low single % with any trail fees.

    His business model didn’t stack up except in the media.

  7. I do hope he hasn’t lost too much money on this venture? No really I do!

  8. How come this guy gets so much notoriety as a business ‘guru’? An insolvency guru more like. Parties and breweries come to mind.

    Lauded by both press and political party in the past. Obviously a con artist of the first division.

  9. Was a rebate of pension commission direct to a client not regarded by HMRC as an unauthorised payment which ultimately could lead to the pension pot becoming taxable or even having to be closed down?

  10. Concerned Adviser 20th August 2013 at 2:31 pm

    I wonder if we have any quotes from either Martin Lewis or Paul Lewis who both gave this guy a lot of publicity at the time of opening. If I remember rightly it was meant to be the new way forward for financial services.

    I wonder how many of the clients actually got 80% of the commission back.

  11. So… it turns out that giving money away is not profitable…

  12. Proof that clients don’t give a monkey about renewal commission so why should the FCA stick their snotty nose in.

  13. I suspect it was as much to do with many providers now looking at stopping renewal payments altogether as well as never ending regulatory fee increases.

    He did well with the publicity though.

  14. The Elephant in the room is what is he going to do about those who have already transferred the commission to him? Will he stop paying them and trouser it, or will he continue to pay the 80% until the provider or the FCA require the firm to provide a proper service for the commission being received?

  15. This news will come as no surprise to those who have been aware of and followed Ivan Massow’s career for the last 24 years or so and, given his talent for self promotion, how could one not?

    As others have observed, high profile and extensively promoted venture after venture, all doomed to ultimate failure, are blindly promoted by ill advised and ill informed journalists, hungry for a story.

    Putting the blame for failure on regulatory costs is also somewhat disingenuous. Sure, costs are stupidly high, and rising, but the rest of us are still getting by. I rather suspect the reality is that there were simply not enough takers to make the deal work.

    However, in the new regulatory environment, there is considerably less opportunity for daft and exploitative ideas like this one, so perhaps this was Ivan’s swansong in the industry?

  16. I am not convinced that this man actually understood the concept of trail commission as was, especially for pensions. Trail appears on pensions (please correct me if I am wrong) based upon a % of the regular premium and not the fund value. If it is a single contribution, then trail is unlikely to have been payable, unless established by way of initial commission sacrifice, in which case the commission is not transferrable.

  17. So what will happen now? he has all those pension plans all paying up to 1.5% commission does he get to keep it? and if so will he be giving the clients ongoing advice?

  18. For those of you who supplied your name, would you like me to supply you with a fresh batch of stones? Why so vitriolic? I’m pretty sure that when Ivan Massow has an opinion, he doesn’t express it anonymously. John (O’Brien)

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