return of trail commission / Massow's paymemycommission

TJ666

Hi,
Has anyone used a pension trail commission returning service they can recommend?
I became aware of this last autumn and finally got round to doing something about it. Massow's Paymemy.com/mission was what I heard about. I filled in details on their website, but their pdf download only gives corrupt files (tried multiple pdf viewers). I've contacted them via 3 different email routes to ask for hardcopy of the form you need to complete - no joy. You can phone but that costs 25p/min - strikes me as very cheeky.
If this is how hard it is to get hold of them before they've got your money, how hard is it if there's a proper problem ?

So, I'm not very trusting of their service right now. Considering they get a cut of the commission they save you, you would think they might actually employ someone.
So:1) does anyone have any good or bad experiences from Massow's service?
2) can anyone recommend a similar service with a different company ?
Many thx

dunstonh

Has anyone used a pension trail commission returning service they can recommend?

The first thing to state is that most pensions do not pay trail. If you bought view a tied agent then these do not pay trail or renewals. IFAs can have contracts that do but its more of a recent thing.

Even on those that do pay some form of renewal, the money is usually in pence not pounds. The figures often quoted by these firms tends to exaggerate the figures enormously.

For example, I just used the massow calculator on a real case that pays me 11p a month which is £26.40 over the next 20 years. According to the calculator it says it could be £24,187 over 20 years.

The calculator assumes 1.5% trail to the IFA. That is ridiculous. Even their lowest example shows £7282. A long way from the £26.40 it is in reality.

2) can anyone recommend a similar service with a different company ?

Why not get an IFA to re-do the contract on nil trail basis assuming you do actually have a contract that pays trail. That way you dont have to share anything.

I would also be concerned as there is no future in these companies that have commission rebates unless they flog your details to others for cross sale purposes.
Rule changes due in 9 months time eradicate natural trail and renewals on new business. So, changing the contract is all it will take. So, why move it to a firm that still takes something for doing nothing when you can charges with no share (as you can do now already)

TJ666

Thanks Dunstonh,
How do you find out what the actual trail commission rate is, as a non-IFA - just ask the pension company ?
The reason I suspected it was quite lucrative for IFAs is that whenever I have changed job, the IFA advising the staff of the new company is usually is very keen to get your previous pensions changed over to use him as the IFA.

you say:

"Why not get an IFA to re-do the contract on nil trail basis assuming you do actually have a contract that pays trail. That way you dont have to share anything."

why would an IFA get involved in redoing a contract if he's not getting paid ? I assume you mean do this for a fee ?
Thanks
TJ

dunstonh

How do you find out what the actual trail commission rate is, as a non-IFA - just ask the pension company ?

ask the pension company. Call if fund based commission though and not trail. Trail is only paid on unit trusts/oeics. Not pension funds.

The reason I suspected it was quite lucrative for IFAs is that whenever I have changed job, the IFA advising the staff of the new company is usually is very keen to get your previous pensions changed over to use him as the IFA.

I always do as well. However, you typically dont get a penny. The reason is that our software can integrate with the providers to update values and fund data. If we are not the servicing agents then we cannot do that.

why would an IFA get involved in redoing a contract if he's not getting paid ? I assume you mean do this for a fee ?

The IFA isnt going to do it out of love but a fee upfront to get nil trail could easily be cheaper within a few years than using a company that is only rebating a certain percentage of trail. Plus, you get the policy reviewed as the same time to make sure it is still current. I am finding that things have moved on so much, so fast, that contracts that were considered good 5-7 years ago are already starting to look long in the tooth.

johnlewis998

It depends what you are after. Payme my is a legitimate service. It is not very popular with IFAs, perhaps not surprisingly. Paymemy pays 70% of trail commission back to you. There is another service called InvestSmart which pays 50% back but also reviews your investments. Both can rebate trail on pensions (what its called doesn't really matter, its still a fee which you can get back!) There is no harm in applying as either service does not cost anything if it turns out you are not paying ongoing commission.

Aegis

johnlewis998 wrote: »

It depends what you are after. Payme my is a legitimate service. It is not very popular with IFAs, perhaps not surprisingly.

Depends on the IFA and why they don't like it. If a client of mine used that service, they'd end up paying for my advice another way if they still wanted to be a client, so it would be of no concern to me.

On the other hand, one of the issues I have with Paymemy is the hypocrisy in what they're doing. They criticise IFAs for not offering any advice while taking trail commission, then they take a chunk of the trail commission in exchange for doing essentially one bit of paperwork. In other words, taking ongoing money for pretty much nothing in return.

In my view you can't argue against trail commission for doing nothing while taking trail commission from client products for doing nothing - it's just contradictory in terms of how they think.

That said, if a client has either decided to part ways with his adviser or has lost contact altogether, then it's certainly better to get something back than nothing, so from their perspective this sort of service can only be a good thing. However, contrast this service with that of Cavendish Online, where they will re-register the agency of any ISA or investment portfolio and will assist with the transfer of any pension into a commission-free variant for a flat fee and you see the business model of a company that genuinely believes that trail commission should either be for advice or cancelled.

All companies are in it for the money, so that's not something I hold against anyone, but Massow's recent launch seems to have something of a "holier than thou" attitude while continuing to carry on the exact same practice they criticise.

dunstonh

It is not very popular with IFAs, perhaps not surprisingly.

I cannot imagine any normal IFA giving two hoots. IFAs deal with advice clients. DIY clients dont want IFAs.

On the other hand, one of the issues I have with Paymemy is the hypocrisy in what they're doing. They criticise IFAs for not offering any advice while taking trail commission, then they take a chunk of the trail commission in exchange for doing essentially one bit of paperwork. In other words, taking ongoing money for pretty much nothing in return.

Exactly. It is a double standard. Accuse the IFA of doing something but then go and do exactly the same thing, albeit for a different amount.

Bennyboy101

When commission is banned next year, I feel the public's awarness of excessively high trail commission will grow, you just have to look at the PPI scandel in recent times. There will be many more punters in the next few years without advisers, at least some of these rebate sites are offering to provide a review along with rebating the commission. Looks like being an IFA is going to get a whole lot tougher....

dunstonh

When commission is banned next year, I feel the public's awarness of excessively high trail commission will grow

I don't. I have been on fee basis for years and not had any issues.

at least some of these rebate sites are offering to provide a review along with rebating the commission.

Although for those people, re-writing the policy on RDR complaint nil commission basis would be cheaper for them potentially.

Looks like being an IFA is going to get a whole lot tougher....

Why? I have worked on agreed remuneration basis for some years and not had any issues. So, what issues do you perceive there to be? Or is it that you represent one of these commission sharing companies that tend to come and go? They will be the ones under threat as why share the commission when it can be turned off altogether?