Towry Law says there is no conflict of interest in offering advisers incentives to recommend its in-house discretionary investment management service to clients.
Last week, The Times newspaper revealed details of a contract being offered to a prospective Towry Law adviser including bonuses depending on how much money they put into Towry’s Independent Investment Management service.
Head of strategic marketing David Middleton says Towry Law is offering bonuses to former Edward Jones’ advisers as part of their employment contract to switch clients to the Towry Law service.
Middleton refused to give details regarding the size of the bonuses, saying they are confidential agreements between Towry Law and its employees.
He says: “We passionately believe that our discretionary investment management service is better than the service that was offered by Edward Jones.
“We want to encourage our advisers to have that conversation with clients. We want them to prioritise that conversation because we think it is an important new service that former Edward Jones’ advisers have to offer to our clients. One way of encouraging people to prioritise that discussion is to reward them.”
But Middleton insists that this does not result in conflicts of interest.
He says: “The fact is that the vast majority of our clients are based in the UK and are sterling thinkers and if they have a pool of money to be managed it is highly likely that an independent discretionary investment management service is going to be something that is appropriate to their needs. There is no concern there is a conflict of interest there.”
Middleton says Towry Law’s best-performing strategy last year returned 20 per cent compared with a 22 per cent return from the FTSE 100.
Independent consultant Stan Kirk says: “For all intents and purposes, Towry Law has become a provider pushing its own products. I do not see that as a negative thing, they have just created efficiencies in their service.”