A Treasury Select Committee has called for "trail" or "fund based" commission to be scapped saying that financial advisers should not pick up renewal commissions for doing nothing. Trail commission is commission that is paid year on year to the financial adviser after the initial advice has been given to you.
Our view
MP's should stay locked away in their little holes sponging off the people and claiming ever higher salaries, pensions and expenses! We accept that some financial advisers actually don't offer any real service after initial advice or a sale has taken place. At we offer various service levels from limited dealings all the way through to monthly feedback reports. It really depends upon what a client requires. What does happen though with every financial adviser in the UK is: 1) Receiving statements and correspondance from providers about clients policies almost every day - this has to be dealt with year after year and is forwarded/dealt with on behalf of the client. 2) Financial Advisers are required year after year to pay for professional indemnity insurance (negligence insurance) to protect all clients (including those that were advised a few years ago) just in case they are found to have made errors in the advice. These costs are huge! 3) Financial Advisers are required year after year to pay for regulatory fees and investors compensation scheme levies to protect investors. Even if you have not seen a client for years, the adviser is still making payments to protect them. The FSCS compensation levy has gone up five fold this year alone!As ever, MP's little understand what really happens within a financial advisory practice. In the 4 years since started, we have won numerous awards for our service and submitted many consultation papers to MP's, the Financial Services Authority etc. Not one MP has ever come back to us and asked us what we think!The only time we made direct contact with an MP to help a client - the MP could not help - in fact the MP was making big noise about endowments and then when a real person made contact he could not be seen for dust! We suggest it is MP's who are drawing an income and not earning it - not financial advisers! How many times have you seen the House of Commons empty when important debates are taking place? Wasters! ...................