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Nic Cicutti: Massow’s trail deal leaves me cold

Here is a confession for you – I am a massive bargain-hunter. I regularly spend many happy hours online, disproportionately far more than any saving I might make, to shave a few quid off the cost of our household’s potential purchases.

Just to give you an example, at the back of my garage are a couple of hundred jars of Kenco, our favourite instant coffee, a bulk buy which I estimate will save us an earth-shattering £2 a week over the next two years.

Even more bonkers is my purchase of 1,400 cans of half-price dog food the year before last. My reasoning was that by the time they were used up, I would be cutting the dog food bill by several hundred pounds over that period.

Happily, I am blessed with an understanding spouse prepared to humour my madness. When I informed her what I had done, she told me it was fine, as long as I was prepared to eat all the remaining cans myself in the event of anything happening to the dogs. I have not had to do so, yet.

Given my embarrassing proclivities on the family shopping front, you might think I would be hugely excited at the prospect of someone entering the financial services market with a money-saving proposition paymemy. com/mission (nifty name) – that offers to return to consumers most of the unnecessary trail charges they pay each year.

As readers of Money Marketing will have noted, its founder and chief executive Ivan Massow is proposing to hand back 80 per cent of trail to punters who switch their investments to his new firm.

In fact, Massow’s new venture leaves me completely cold. Don’t get me wrong, I am totally with the FSA in terms of its argument that trail commission is a payment for an ongoing service that should be provided by an adviser to his or her client.

I have no problem with the argument that people often pay trail commission for a service they mostly do not receive.

What I find more interesting is Massow’s business reinventions, from niche IFA catering to the gay market to becoming an agent for Zurich, a relationship which collapsed in acrimony.

Last year, Massow was named as managing director of a price comparison site, CompareForGood, which promised to pay a large slice of its commission earnings to Oxfam.

Yet anyone searching for CompareForGood will now only find a link to BeatThatQuote, the original site that was meant to provide the white-label comparison on service on Oxfam’s behalf.

As for, what is disappointing is the fact that if you read the Faqs on the site you will notice there is little mention of any serious ongoing service to clients if they switch their existing assets. Almost every question relates to how you can move your money and when you can expect to be paid and when.

If you want advice in relation to your investments, whether future or existing ones, you will have to go to another adviser for it – who presumably will not mind not receiving trail commission because the up-front fee they charge will be ample reward for their services.

Massow has told the media that he is not targeting existing IFAs’ clients, only orphans who no longer have an adviser but those attracted are likely to be both.

What appears to be saying is because so many IFAs use trail as a way of receiving ongoing payment without delivering any service for that money, then it might as well do the same itself. In other words, let’s accept the status quo rather than force advisers to do better.

But that is not the issue. What matters is that for too many years, IFAs have allowed themselves to be sucked into a relationship with their clients where the issue of remuneration – what they are paid and the service they will provide in return – has not been properly discussed.

Nic Cicutti can be contacted at


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There are 37 comments at the moment, we would love to hear your opinion too.

  1. Compare the Meerkat 15th September 2011 at 10:10 am

    Nic, you’re so Moneysupermarket…

  2. Dear Nic Cicutti

    Just to be clear, we’re not trying to take work away from quality IFAs. We’re simply helping the 10 million people orphaned by RDR (or who get no service from their existing IFAs), get some value from their trail commission. This commission is often going nowhere (or to speculators who purchased the book when the IFA retired). I’ll say this slowly Nic, these clients currently get NOTHING for their money; so this is a great deal.

    Not only do we locate and rebate 80% of everything we find to the client (in itself not an inconsiderable task and with high acquisition/marketing fees), but for our 20% share, we also:

    1. Do most of the things a standard servicing agent does; but better because we allow the client to manage their change of address details etc online.
    2. Manage trust accounts, including free client money transfer systems which allow them to pay their money anywhere.
    3. Provide an online client portfolio and status tracking system.
    4. Manually collate and reconcile commission payments (because the insurers are still paper based on the whole); keeping clients updated every step of the way.
    5. Provide a free ‘technical advice’ division for policy queries.
    6. Offer a comprehensive introduction service to fee based advisers for people who require additional advice.

    It amazes me to think that you can’t see how much more we do for our trail commission at only 20% of the price of normal IFAs. More than that Nic, it’s upsetting that you simply can’t embracing large scale reforming enterprises like rather than simply feathering your own PR bed to frustrate positive action. It’s exactly because of clever ‘nay sayers’ like you, dressed as modernisers, that the industry has remained in a dark and unethical place which has repeatedly required outside regulation and policing. is just another alternative for clients who don’t have or want a relationship with a traditional IFA. We’ve tried to keep it simple and clients are responding well with thousands of enquires within our first few days.

    Kind regards,

    Ivan Massow

  3. I hear the price of manure is rising Nic.
    You probably have a big enough supply without adding to the crap stored in your garage.

  4. This could end up one of the most pleasurable discussions/arguments I’ve ever read if Nic and Ivan end up having a public spat!
    Fight, fight, fight…….

  5. Instant coffee. Why does that not surprise me?

    The price of everything and the value of nothing!

  6. 6. Offer a comprehensive introduction service to fee based advisers for people who require additional advice.

    Will Massow disclose how much he will be charging the new adviser, in introducer fees?

  7. I have to say Ivan’s service is well judged in terms of public opinion, and in all honesty, it is difficult to defend taking trail income where literally nothing is being done to earn it. So it’s a good idea to offer this service and I am sure it will generate lots of applicants in the early days.

    It will however fail in the longer term because –

    1. The saintly tone Ivan has adopted is irritating to a lot of influential people in the industry with deep pockets. I expect issues will crop up with the FSA/HMRC and others in due course as pressure is brought to bear.

    2. There is no way of protecting the income stream as the business grows. It is easy and cheap to set up a 90 or 95 or 98% rebate service once some other fool has done all the leg work of identifying the trail income and setting it all up in a tidy way. Clients cannot be tied in and by definition are hardly likely to be ‘loyal’ to Ivan’s business. So will be with us very soon.

    3. The admin implications are appalling. Ivan says he has had thousands of enquiries in a week, and there will be thousands more next week. So the task of ringing various defunct, incompetent non responsive life companies starts and that is truly scary. How many times in a day can a person be told that ‘we don’t use e mail…’? or ‘our response time is four weeks’?

    4. Ivan is running it. Everything else he has done has gone t*ts up and once it collapses, the policies form part of the assets of the business in receivership and can’t be stripped away without permission from the receiver.

    This may well provide considerable entertainment over the next 12 months. Hope so, it is more fun than watching the Eurozone implode.

  8. How can you comment of the finer points of Financial Services and drink Instant Coffee ? Is that what you call an Oxymoron? A bit of class please.

  9. IFA of 18 yrs - who is scared of Massow? 15th September 2011 at 2:23 pm

    In life, take any 10 people in the same boat and put a relevant idea to them. Statistically – 3 will say YES to whatever you say, regardless. 3 will never agree and the rest can be swayed either way.

    Ivan’s model, will potentially attract 70% of people. The other 30% will stick to what they want to like and know.

    Lets face it, IFA’s are trembling in fear of Ivan’s model. However, the solution is so clear, its crazy – MATCH MASSOWS DEAL – or risk losing a client right? I believe that a vast majority of clients will want advice from their long term adviser.

  10. Nic, please cease perpetuating the myth that trail commission automatically imposes a servcing requirement on advisers.

    Whether it does or doesn’t will be down to the terms of businessor client agreement used by the adviser and agreed at the outset with the client.

    Consider this true scenario. A client had been sold an AXA investment bond by her building society (tied, of course) and they took close to 8% upfront commission with no ongoing trail. The building society has no ongoing legal requirement to offer her ongoing advice.

    Scenario 2 ; I meet a client and am able to take up to 7% on a similar bond or some other sum such as 3% initial and 0.50% trail. If I take the 7% (which I don’t) I have no ongoing advice requirement. Just because I might take 3% and take 0.50% or 0.25% trail doe snot automatically mean that I should give ongoing advice.

    You are confusing the income taken with the client agreement and they can and usually are disparate.

  11. Nick – Hope you know the difference between ‘Use By’ ‘Best Before’ and ‘Sell By’ dates. Massow’s sell by date is 31st December 2012 if he survives till then.

  12. Thinking long and hard about this one, the solution is to let the client decide.

    If he/she has paid trail and not received advice they should be able to contact the provider and ask for that to be paid back onto plan or to them (minimum premium aside). If they select for the trail to be paid back they forgo the right to complain on the plan, if they opt to not return the form to the provider the adviser will receive the trail as normal.

    A decent adviser should contact his/her client at least once a year so there should not be an issue. If he doesn’t review there will be an increase risk of a claim against the adviser.

    As for orphan clients wouldn’t it be better for the provider to stress the need to select a servicing IFA that can be done on the first page of statement and the iFA contacted could decide whether to service that client or not on a commercial basis but by accepting trail and servicing rights any potential claims going forward should be again the new IFA and not the FSCS.

  13. Those that can, do. Those that cannot should leave well alone.

  14. Ancient Wisdom is.... 15th September 2011 at 2:37 pm

    if every IFA rebated 80% of trail commission = Another failed business for Ivan ‘the peoples champion’ Massow and he will go on a mad bender for 2 yrs, get wrecked and come back again with another get rich quick scheme.

    I agree with IFA of 18 yrs comment.Those that can, do (we all can) and those that do – now is the time to start emailing clients quoting Massows website and offering.

  15. Leaves you cold?
    Shame it didn’t strike you down dumb.

  16. Nic, If anything ever happens to your dog can MM publish a video of the subsequent ‘feast’…Please.

  17. Most client’s, in my opinion, would be much better off transferring their plans to an IFA who does have a regular review process in place. (Payment can be either fee based, or part, or all of the trail). This way the client would receive the ongoing advice that the trail commision is (arguably) designed to remunerate the IFA for and for the client to receive advice along with appropriate fund switch recommedations, product / taxation advice, risk profiling etc.
    Just leaving what may well be an outdated plan to run its course and receiving a commision refund from a firm (that is again doing that much) is NOT a good solution for the client.

  18. Who cares what this ex/current businessman and Tory candidate does.No threat to any good IFA.

    There was a BBC documentary about him years ago where he talked abou his success (filming his Ferrari and pedigree dogs)

    He must have run out of money so can’t do anything other than take it from somebody else.

  19. Firstly you don’t buy a lot of service for 0.5% unless the funds are very substantial.

    I’ve always regarded renewal commission as paying me in total for those clients who needed service this year. It’s a broad brush approach, but it’s worked for the many year I’ve been in business.

    e.g. One year a widow needs service for which she couldn’t afford to pay a fee and some of the other clients’ renewal commissions pays for it.

    This business model has served our industry well for more than 100 years and we change it at our clients’ and our own peril.

  20. Nic, when you mentioned dogs, early in the article, I assumed that you were setting up a metaphor for Mr. Massow. However, nowhere in the article can I find the word “parasite”. Surely more apt than any dog food reference, no ?

  21. Ivan

    Can you tell me what procedures you will put in olace to dissuade people who do actually get ongoing reviews and service from their IFAs, but who are just tempted by your money back offe, from climbing aboard your venture?

    Seems to me your business is basically saying “Are you paying for nothing? – then come to us and pay a bit less – for nothing”

    Hugely tempting I’m sure, for the financially challenged.

    I just wonder why you want to clutter up your business life, basically doing nothing more than collecting an amount of money from one bunch of people, slikcing off you profit and then sending the balance to another group of people.

    What a hugely satisfying business proposition that is. 🙂
    Ian Coley
    Medical Investment Services

  22. 10 million orphan policy holders all paying trail commission! Surely a made up number if you accept that most banks/ national IFAs have feasted on maximum initial and no trail for years.
    Ivan I think you may end up having to do an awful lot for not very much….What will your next website be?

  23. Mr Massow says he will return 80% of the value of trail commission to the policy holder. He does not say, “to the policy holder’s pension”, so is he promoting a scheme which will routinely make unauthorised pension payments?

  24. Even though past performance is not necessarily a guide to the future, I nevertheless feel the website needs tweaking:

    We will find this commission and pay 80% of the full amount back to you…………until such time as I’ve spent it all, then you suckers can go to the back of the creditors queue (again).

  25. In individual in question is good at one thing, and that is self-promotion it seems. He needs to decide who he is first and foremost, IFA to the gay market, agent for Zurich, peoples champion offering a bargain? None of the above? Seems to have had more jobs than Bob the Builder.

    Sweeping up FUM on the cheap is good if he is planning to sell on his current business venture in a few years. Which is likely the medium term plan. It is no so much clever as it is obvious, more should do the same.

  26. Hi there chaps. I don’t want to get into a fight with any of you happy campers over your comments, only to clear up two misconceptions: the dog food was all eaten up in the end, thankfully – by the dogs. I have since bulk-bought more, but only 3 month’s supplies at a time as the thought of scoffing Winalot for several years was rather off-putting.

    As for one or two snobby references to our taste for Kenco, yes we do enjoy an occasional cup of the real stuff (roasted and milled from Tazza D’Oro near Piazza della Minerva in Rome, naturally) but Kenco does the trick when you’re looking for an immediate caffeine fix. And at least it’s not Nescafe or Maxwell House….

    Happy savings to you all.

  27. Nigel Barker-Smith 16th September 2011 at 10:11 am

    @Norm d’plume

    No it’s not right to cross-subsidise your trail commission.

    It’s a very poor business model for you, and it stinks for the clients.

    Have you asked your clients that are overpaying if it’s alright for them to subsidise the rest?

  28. I’ve followed these discussions with great interest. I have 7 old policies and recently made enquiry about “trail” commission. 4 of these are in a closed fund which I have been told pays no “Trail” and the other 3 pay less than £1 per year of “Trail”. Still 80% of that is worth thinking about.

  29. Nigel
    Do not those of us who pay more tax & NI subsidise those who pay less?

  30. As for one or two snobby references to our taste for Kenco, yes we do enjoy an occasional cup of the real stuff (roasted and milled from Tazza D’Oro near Piazza della Minerva in Rome, naturally) but Kenco does the trick when you’re looking for an immediate caffeine fix. And at least it’s not Nescafe or Maxwell House….
    Snobby? Nic? No!

  31. @Nigel

    When you last went shopping and walked out having decided not to purchase anything, did you ask everyone in the queue for the checkouts if they were happy to subsidise your browsing?

  32. Please, please, please stop giving that buffom Massow anyone more press – ignore him as that is all he deserves, he is no better than an ambulance chaser, the money for nothing brigade at our expense , i detest the type.

  33. I feel very sorry for career IFAs who have worked so hard building up a client bank without dipping in and out of the business like he has.

    Massow has nothing to offer the financial services industry. He should try politics again. I’m sure his fans would vote him.

  34. @ Nigel Barker-Smith

    If you feel so strongly about cross subsidising, I take it you never advice on or have any life assurance or annuities?

  35. Nigel Barker-Smith 25th September 2011 at 11:37 pm

    Cross subsidy serves many good purposes in society. Mark above uses a good example of insurance/assurance. The difference in my opinion is that clients understand and accept this version.

    My issues stems with trail and the fact that clients in the main have no idea they are cross subsidising others, and again would in the main choose not to out of net income.

  36. Nigel Barker-Smith 25th September 2011 at 11:43 pm

    Why is trail commission transferred to a new agent if it is owed to the initial selling agent?

    Probably because it’s a servicing payment?

  37. Competition stimulates quality – Good luck to paymemy.

    It will rid of the dead wood IFAs to say the least. the stronger ones will prevail.

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