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Towry to offload 6,000 clients

Towry is closing the accounts of its 6,000 smallest customers, saying the service it is offering them is not cost effective.

The group is closing its doors to clients with less than £5,000 in assets on December 10, in a move which will affect former clients of Edward Jones, which it bought in October 2009, and existing Towry clients. It is targeting clients with at least £100,000.

Head of marketing Peter Foster says: “A key part of TCF is to make sure you are promoting yourself to appropriate clients. If you look at the total of the money in these 6,000 accounts it is not a lot of cash.”

He adds many of the clients the firm has inherited from Edward Jones have their portfolios invested in stocks which are not appropriate for their level of risk tolerance.

In a letter to affected clients last week, seen by Money Marketing, Towry head of wealth advice Andy Cowan said they have the choice of liquidating their investments or being transferred to another company.

He says: “The process of transferring securities to another company… can be very lengthy and you should be aware that it can take several months. There are also costs associated with this approach.”

The letter states clients will be charged £20 plus VAT per security per account to transfer into another company’s name. They will also be charged £57.50 to terminate or transfer an Isa account to another company.

Clients who do not respond within 45 days will have their investments liquidated automatically and cheques with the proceeds will be sent to their addresses.


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There are 16 comments at the moment, we would love to hear your opinion too.

  1. TCF? FTC more like! 1st November 2010 at 12:54 pm

    Surely it would be more TCF, as this a decision taken by Towry, not the customer to offer some form of reduced fee or free exit option? It isn’t the customers fault that they’re value of their investments doesn’t meet their new requirements. Also perhaps Towry might want to refresh themselves with the HMRC timescales for an ISA transfer….several months is not on! maybe they should have considered their current backlog before doing this?

  2. It might have been more diplomatic and helpful to the clients if they’d passed them on to another firm.

    I wonder what will happen if a client doesn’t receive the correspondence and Towry cashes all their holdings in and creates a CGT liability? Always assuming that they have a gain to have a liability on, of course!

  3. TCF?
    We bought you.
    We don’t want you.
    You will no longer get any advice.
    And we’ll charge you for leaving.

    Yes we’ve changed everything about the relationship but you can pay for it.

    So who’s being treated fairly?
    I wonder if the FSA will step in to protect the clients?

  4. One thing that the report misses out is that the client has to inform Towry of their intentions AND find a new IFA AND get that IFA to put in transfer documents to Towry, all with the 45 days from the date of the letter. Otherwise the liquidation happens.

    See a copy of the letter sent out at:

    These people will be by definition some of the more vunerable clients with smaller portfolios, not savvy to the wiles of big corporates and not understanding why this has come out of the blue.

    Who is going to stand up for these people? Not the FSA for sure, going by it’s current track record. TCF? What a joke!

    Where does the government stand on this?

  5. Towry and KPMG knew this before they took over Edward Jones. To say now, 12 months on that they are going to apply the £100k limit is surely double standards and by def duplicitous.
    The FSA allowed this to happen and must step up to the mark and put it right.

  6. One wonders whether or not TL makes clear to prospective new clients that if they should at some future date wish to transfer their invested funds to another firm, it’ll take months because TL’sd admin is so poor and TL will levy a charge for it? If you had £100K or more to invest, would you buy into such a proposition? Hanged if I would.

  7. I have read the letter. It clearly states that Towry will waive dealing charges for liquidating the portfolio – seems fair – unlike your article which does not present the whole picture – why don’t you publish the whole letter?

  8. Believe what Towry say and it’s everyone except themselves that are responsible for transfer delays- now it’s SEI.
    Peter Foster more like Peter Mandelson ‘ Lord of Spin’.
    Has anyone seen A Fishers CV? I find it frightening that companies house can allow such a man to be a director. All the more worrying is that regulators believe he adds value, just examine his track record and let us have your thoughts.

  9. Waive dealing charges, but what about in specie transfers. Dealing charges are only part of the expenses.

  10. For the letter read comment above from John Simpson, it was right before yours. Please read comments before commenting.

  11. I actually agree with Towry on this one although I may not agree with their process. I am sure they could have sold the clients to one or two bucket shop IFA practice out there.

    Ultimately the old 80/20 rule applies in an advisory business. You spend 80% of your time on your smaller clients. I wish I could get away with it in my own business. It would be better for them and us in the long run.

  12. I am one of those enforced Towry investors with less than £100,000 in their capable hands.
    I have received no letter. I have been trying to get hold of my investments for six months.

  13. I have just read on another site that a former adviser has been accused by Towry of breaching his former employment contract and soliciting clients.
    The former adviser states that all of the clients who are transferring have less than £100k invested.
    This begs the question, does it not – What value is there to the client or anyone else in chasing a former adviser who has got clients that Towry don’t even want themselves.
    I thought Towry were too smart to waste money on frivilous plans – they are after all owned by a private equity firm. Clearly the insanity knows no bounds and maybe the private equity firm needs to get a firm grip (perferably around the neck) of Andrew Fisher.

  14. huw frederickson 3rd November 2010 at 3:03 pm

    There are plans being laid by firms large and small across the industry to carry out major client culls in anticipation of RDR – isn’t this totally inevitable? RDR will produce non TCF outcomes right left and centre. I’m sure the FSA didn’t intend that to happen but it will, although presumably the Banks will have a proposition for these clients. The message is stick to HNW as per Towry’s conclusion, and if you can’t find those clients leave the business or you’ll go bankrupt anyway. As we are all qualified to work shifts in Mc Ds at least there are attractive alternative jobs available with free onion rings.

  15. If i was a client I would officially complain about the leaving admin fee.

    Just watch the “gesture of goodwills” being given so clients do not have to pay the fee.

  16. Towry have no right to charge any transfer costs. The clause they refer to is vague and non specific (no mention of transfers or mutual funds) and Edward Jones advisers and head office staff understood the £20 per line charge only applied to Paper Certification. Prior to May, I understand many (if not all) clients were having their portfolios transferred at no cost.

    What I find disappointing is that Towry are aware of the interpretation of the clause by Edward Jones (as are ex jones advisers currently with Towry), but they are still implementing the fees. When clients signed terms they were doing so with an adviser who believed that any transfers at some later point would have been free (apart from the ISA cancellation fee).

    This line fee should be vigorously disputed and Towry should refund, or made to refund, any client that has been charged for their transfer.

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