In his first interview since the closure was revealed, the millionaire entrepreneur confirmed that London-based Massow’s Ltd would shortly give up its FCA registration, saying that he had to “concede defeat” as regulatory costs took their toll.
The business, which launched in 2011, offered clients the chance to claw back 80 per cent of trail commission on products recommended by advisers who were not providing an ongoing service, with Massow pocketing the rest.
Admitting that the firm’s closure, announced on 19 August, was a “disappointment”, Mr Massow said: “I do so many more things that were always much easier than this business, if I’m honest. It was taking up so much of my time and the margins were so slight, given that we were losing a lot of money. The cost of professional indemnity insurance, even though we had no liability, was so much that we had to concede defeat.
“The nature of business is that you set up some companies that succeed and lots that fail. When you are starting from scratch with an entirely new business concept, you have to keep trying if you are going to make it work and I couldn’t allow myself to give up. However, I realised that all the factors involved meant it just could not work.”
However, he vigorously denied that the firm was pocketing trail commision that rightfully belonged to customers. It follows scrutiny over a letter sent out to clients last week, which stated that the firm would “not be able to rebate any commissions” it received and “would keep them” if clients did not switch to a new adviser.
Mr Massow described media reports of the letter as “scurrilous”.
Simon Webster, director of Kent-based Facts & Figures Financial Planning, said: “Massow had a flawed business model from the beginning because, I believe, it was predicated on the assumption that the public is stupid.”