Towry Law takes up to £6m annually in legacy trail commission for 300,000 clients who no longer receive ongoing advice from the firm.
Chief executive Andrew Fisher, who has been outspoken in his criticism of commission-based advisers, argues it is right for Towry Law to continue receiving trail. He says: “These are clients that bought products from Towry Law before we owned it. I have no idea who they are but it is perfectly acceptable for someone who buys a business with historical agreements in place to honour those.
“It is not physically possible to trace back who these clients are and, in practical terms, it is not possible to turn the com- mission off.”
Towry made a pre-tax loss of £10.6m for 2008, which Fisher attributes to infrastructure investment.
West Riding Personal Financial Solutions managing director Neil Liversidge, who recently criticised Fisher’s stance in an open letter, says: “His position has done real harm to the image of IFAs over the last few years. I hope all commission-based IFAs can now look forward to a full apology from Fisher for his criticisms.”
In October 2008, Fisher wrote to Gordon Brown, arguing that commission-based remuneration had contributed to the banking crisis. He said commission incentivised advisers to “direct clients into inappropriate debt and ill-advised savings and investment products”.