Barclays Wealth may face legal action backed by trail commission reclaim service Massow’s over claims it should have provided ongoing advice to receive almost £10,000 in trail, according to reports.
Muston had £9,800 deducted from an Aviva fund which was paid to Barclays Wealth in trail commission.
Massow’s director and chartered financial planner Sarah Killick told the FT it appeared Muston was not given a portfolio review of risk-profile check since 2004 when he first invested £200,000. The money was invested through a Birmingham IFA which was later taken over by Barclays Wealth.
Muston says he was not aware the trail commission was being deducted until recently. The case is thought to be the first of its kind.
There is no regulatory requirement to offer an ongoing service in exchange for trail commission, which is often taken as an alternative to a higher upfront charge.
In a statement to the newspaper, Barclays Wealth says: “In line with industry practice at the time of the sale, Barclays received an upfront fee for advice, and trail commission of 0.5 per annum from Aviva for the sale of this product, deducted by Aviva from the fund.
“Mr Muston was fully aware of this arrangement and he signed a document to that effect, which clearly laid out the guidance on trail commission. Again, as per industry practice, the trail commission was not for advice – though, by the nature of his relationship with Barclays, Mr Muston was entitled to advice as a matter of course.”