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PIMS: Trail will cease by 2016

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Tim Sargisson: ‘Already seeing instances where trail is being cancelled’

IFG Financial Services says all trail payments to advisers will be switched off by the beginning of 2016.

Speaking at PIMS on board the Aurora last week, chief executive Tim Sargisson said the firm has told its advisers to start planning for life without trail within three years of RDR implementation.

Sargisson said: “We think trail will be a thing of the past and when we were putting together our post-RDR plans we said we thought it would be finished within three years from the beginning of 2013.”

Sargisson said this time frame is still likely, but it is not clear whether the end of trail will come as a result of providers switching the payments off or whether the Financial Conduct Authority will force the move.

Sargisson said: “there is no certainty over whether the regulator will force providers’ hands or whether providers will just start to switch it off although we have already begun to see instances where certain trail is being cancelled.

“Another issue arising from the trail is whether or not providers will retain that payments if they are not going back to the adviser or whether they are going to pass them back to the customer.”

Sargisson added advisers will be under more pressure not to take trail payments if clients became more aware that the payments exist.

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