4th November 2013

Hit me baby one more time

How much more must the world of financial advisers come under attack?

Nearly 1,100 advisers have now voted on our poll “Will the removal of trail commission have a negative effect upon your business”?

90% say it will be catastrophic!!!

We have seen many comments like those below across a number of LinkedIn groups on the subject as well as our site:

“Does anyone know if the FCA has publicly given any view on Friend's Life's decision to stop paying trail and not passing back to the relevant customers either”?

“Trail commission is contractual on contracts already in force. It was disclosed to potential investors before they invested and one can only presume that they were content with it”. 

“Can someone please enlighten me about the reason for switching off trail if a change occurs with investments, which seems to be applied differently according to product provider. I have seen no explanation from the FCA why this has been introduced”?

“I think there is an argument for the regulator to ask companies that stop trail commission payments to justify why they have done so, in the interests of TCF”.

“I always viewed trail and renewal commissions as a form of contractual deferred compensation. The providers retain their business largely through the efforts of their reps/advisers/agents so they had to provide some inducement to maintain servicing . That inducement came in the form of trail and renewals. The less paid in trail and renewals the more vulnerable was their business long term”. 

So, do advisers just sit there and let it happen? Does anybody care? Politicians are not interested until the FCA review happens.

You can read my mail trail to Mark Garnier MP on the matter. It spells out clearly the issues and why advisers would find the removal catastrophic yet he cannot do anything and neither can parliament.

This is like a house of cards about to fall down as a single ‘teeny tiny’ card is accidently touched!! An unintended consequence 

What do you want doing about it?

When do you want it done?

As Britney sings ‘Give me a sign”! Because at Panacea Adviser we want to see some protective action now!

Regulation, RDR, Panacea Comment, FSA/FCA

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Comments (2)

What this needs is a class action by the IFAs most affected.

A blanket boycott of the insurers doing it would be good. Having said that, I suspect that such a boycott is unlikely as, in my 41 years in finacial services, I've noticed that IFAs are a disparate bunch. Too often, ehrn I was a company man, I saw a general agreement on something, only to see a few try to see if they could steal a march on their colleagues by ignoring what was agreed. The insurers know this.

Unless we walk the walk, all these discussions on unfairness etc. etc. are no more than hot air.

Id trail commission the bridge too far which will spur action?

Richard Brown   11/11/2013   09:23
I feel like the proverbial "piggy in the middle", with no voice. Where are our so called representatives on this issue? I hear little or no support from the APFA, PFS on this issue. It is the same old, same old - we as a profession are left out in the cold as usual. Bring back the LIA!! At least I felt part of someting in the days when they stood up for us.
Over the years (26 for me) we have taken the punches and come up fighting, but there are only so many times we can say 'it makes us stronger'. I someimes loose the will to live.

Wendy Roberts   11/11/2013   10:09

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