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PIMS: Trail will cease by 2016

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IFG FS chief executive Tim Sargisson

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, IFG FS 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 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.

Last month, the regulator’s platform statement set out a ban on legacy payments between fund managers and platforms casting doubt over the future of platform trail.

Sargisson said: “I do not think it is a certainty 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 the provider retains that payment if it is not going back to the adviser or whether they are going to pass it back to the customer.”

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

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. So — here we go again !! — legal contracts with clients and apparently Product Providers mean nothing — when we were criticised for taking initial commissions and reduced or eliminated them in favour of trail we should have stuck to having money in the Bank because neither product providers nor Regulators can be trusted. Instead of initial commissions pressure is now on to maximise upfront fees and reduce clients servicing.
    And they dare to say that we have to be fit and proper in our behaviour !!

  2. Turn off the trail and how Isa firm supposed to maintain files indefinitely and defend against stake claims & pay PI in excess of the 15 year long stop?

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