InvestSmart, a new commission rebate firm also offering independent financial advice, launches this week, eight months after the launch of an online venture focused on trail repayments developed by controversial former IFA Ivan Massow.
The new firm, run by Tom Russell, an IFA with 20 years of experience, claims to be able to put 50 per cent of an investor’s trail commission back into an investor’s fund.
Unlike most other commission rebate companies, including Mr Massow’s Paymemy.com, Mr Russell, who also runs Beacon IFA, based in Gwent, Wales, said his company would provide a free annual review of fund performance, with a fee-based independent advice service available if necessary.
Mr Russell‘s venture comes after the September launch of Mr Massow’s website, which is designed to recoup trail commission on behalf of clients and has been designed to capitalise on ‘orphan clients’ that will be created by the Retail Distribution Review.
Advisers were up in arms in an online forum regarding this venture, but in an interview with FTAdviser Mr Massow claimed people that have “a quality relationship” with their adviser “won’t even know that we exist”.
Mr Massow added that he had changed the wording of the website to make it clear to clients exactly what the website does and to prove to some clients that they could be getting “free money”.
Mr Russell said: “The rules on commission are changing at the end of the year, yet most investors are blissfully unaware.
“What many people don’t realise is that they can get half their commission back going forward as of today.
“The people hardest hit by the RDR will continue to be so-called orphan clients – investors that have no adviser. They are the ones paying the most and receiving the least and we think it’s time that changed.
“The movement against trail commission is gathering pace and these days there is no reason at all for anyone to pay over the odds. The average investor is looking at a rebate of around £180 a year through InvestSmart.
“There are other routes where you could get even more commission back, and that is fine for self-directed investors, but we are appealing to a broader range of people who want on-going service and an annual health check on their funds.”
