The closure of Ivan Massow’s trail commission return business is set to be scrutinised by a BBC Money Box programme tomorrow.
The programme will feature an interview with Massow about the venture and why it failed, as well as adviser interviews about trail commission generally.
Massow announced last week that the service, Paymemy.com/mission, would be closing, citing escalating regulatory and professional indemnity costs. It launched in 2011, offering to return 80 per cent of a client’s trail, whilst keeping 20 per cent.
An email to clients initially stated the firm would retain all future trail income unless the clients moved. It said: “You could do nothing – but we will not be able to rebate any commissions we receive, and will keep them…. This may be useful for people who get little or nothing back and quite simply can’t be bothered to move their affairs.”
Massow has since clarified the firm will look to deregister at some point, with any trail not moved by then kept by the insurer.
Massow, a former IFA, told Money Marketing this week he faces personal losses of £200,000 as a result of the closure.
Tomorrow’s programme will be the third time BBC Money Box has covered the trail commission debate. It first looked at the issue in September 2011, dubbing it “one of the industry’s best kept secrets” and sparking a series of open letters around whether the receipt of trail was justified.
Money Box returned to the issue in January this year, questioning why advisers should receive ongoing commission for pre-RDR business without offering an ongoing service.
BBC Money Box will be broadcast on Radio 4 tomorrow at 12pm.