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Massow firm ‘not targeting IFAs’

Former IFA Ivan Massow insists good advisers have nothing to fear from his new business, which encourages clients to switch to his firm in exchange for 80 per cent of trail commission.

The firm will keep the other 20 per cent. Massow’s plans received a large amount of criticism from IFAs on the Money Marketing website. He stresses he is only targeting clients who are not receiving ongoing advice and are likely to be orphaned after the RDR.

The firm will not offer advice but can refer individuals who want advice to other firms. Massow’s website, paymemy.com, states that trail commission can reach up to 1.5 per cent of the value of annual investments.

One client testimonial states: “I always wondered why my IFA sent me a hamper at Christmas – turns out he was skimming over £5,000 a year from my pension fund.”

Massow says: “We are not targeting the IFA community. We are specifically concentrating on the millions of people that are going to be orphaned without an IFA as a result of the RDR.

“Many clients have already been orphaned. I do not think any quality IFA who has an ongoing relationship with their client has anything to worry about.”

He admits that while the figures quoted on the firm’s website are high, there are “rare but not uncommon” instances where trail commission could reach 1.5 per cent such as on offshore investment bonds.

Massow says the payments back to clients do not constitute an unauthorised payment, which would generate a tax liability. He says this has been confirmed by HM Revenue & Customs.

Evolve Financial Planning director Jason Witcombe says: “Consumers have a right to know what they are paying in trail commission and should expect to be receiving an ongoing service for that.”

Are you worried about Massow’s new business venture? vote here

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. It is about time someone gave IFA’s a run for their money.

    Having looked at this in relation to an offshore trust, my (now ex) IFA has been taking 1.3% trail commission every year for the last 17 years and that currently amounts to a whopping £7.240 annually – and I don’t even really need advice at all on it.

    Guess how often I hear from that IFA – never – how is that good service or value for money (and no this isn’t the only product I have).

    I shall be switching to Mr Massow’s service and am rather glad this has been brought to the general public’s attention – well done.

    Martin

  2. @ Martin.

    There is an alternative.

    Switch to a “fee paying” adviser. Have a really grown up conversation with him/ her about what you want from him/ her and what you are prepared to pay for it. Turn off the 1.3% tap completely and avoid having to pay £1,448.00 per annum to Mr Massow for doing no more than your ex IFA. If the new adviser only charges you say £1,000.00 for doing a decent job then you will get the best of both worlds rather than feed yet another parasite. I urge you to do justice to the £500k investment you have and seek the right person to give you the right advice. They do exist…

  3. Checked out this website a few days ago having become dissatisfied with the service being provided by my IFA and was pretty impressed in general.

    I’ve already applied and had my claim processed and looking forward to hearing back on how much I will be entitled to!

  4. Had to respond to the three individuals previously leaving comments. These have obviously been put up to help with Mr Massows new venture. Just read any of the last years responses to items on your site, have you ever seen all names provided and all postive reponses? Come on now Money Marketing up your game.

  5. This venture is similar to directing traffic except a policeman charges nothing?.
    It’s cop out (excuse the pun) to redirect clients (orphan or otherwise) to regulated advisers and then charge them a fee.
    If getting round RDR is this simple why dont we refer all our clients to a neighborhood IFA and he can transfer all his clients to me. Job done

  6. Is it not the case that the firm taking over the adminstration can also be seen to be responsible for anyongoing advice? Or the lack of it?

    “Consumers” can claim for not being advised.

  7. Mr Jeego:

    You are incorrect, I have read this forum for a while, but really haven’t felt the need to comment before, I have nothing to do with Mr Massow or his venture.

    I will however say that the service from them to this point has been friendly, polite and professional.

    Mr Hutton:

    Of course I appreciate that I could go and “switch to a fee paying adviser” but I really don’t need to and of course there is the issue that the past firm has made £123 THOUSAND pounds from me in the past 17 years without my knowledge or understanding that they were taking this commission – that isn’t good business practice, fair and I would be amazed at any IFA fee charging or otherwise that could validate a level of advice for that level of charges – its another example of RIP OFF BRITAIN if you ask me.

    It leaves me totally disgusted with an industry and yet that industry seems totally intent on “blaming the whistle blower” – in this case Mr Massow – he can happily have £1500 a year from me – and if this pays for him to be media savvy and communicate his business, long may he carry on, he has just saved me £5,800 per year because I read the news – the news that he is in.

    Martin

  8. Most client’s, in my opinion, would be better off transferring their plans to an IFA who does have a regular review process in place. This way the client would receive the ongoing advice that the trail commision is designed to remunerate the IFA for and receive advice along with appropriate fund switch recommedations. Just leaving the plan to run its course and receiving a commision refund from a firm that is again doing nothing is NOT the answer.

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