Trail Commission

Published / Last Updated on 15/06/2015

Stop Hidden Trail Commissions or Get it Back (Download FREE TEMPLATE Letter)

Many investors are unaware that there may be hidden commissions in their investments and pensions called fund based or trail commissions paid to their banks, building societies and advisers on a monthly or yearly basis effectively wiping out any growth you might have had over the last few years.  

2.5% Yearly Growth Needed Just to Stand Still

These hidden commissions whilst looking small are usually between 0.5% pa and 1% pa.  When combined with the yearly management charges levied by the pension or investment company itself of up to 1.5% pa can mean hugely reduced investment returns.  In some cases your investments need to grow by at least 2.5% each year, just to stand still.  A tall order in the current turbulent investment market.  

Trail commissions and the ongoing service your financial adviser offers you are supposed to be agreed with you before you take out your investment and are paid from your investments to your adviser cover ongoing and future advice and servicing or you can agree to no commissions at all and ongoing service paid separately as a fee.  

Banks and Building Societies Worst Culprits - Stopping the Sharks

Ashley Clark, Director at claims the worst culprits for receiving hidden commissions and offering no ongoing advice are tied advisers and bank advisers.  He claims: “Over the years, I have come across many investors who have been charged a full up front commission when investing their money but also then an ongoing trail commission deducted and paid to their adviser, usually a trusted bank or building society.”

Cancelling the trail commission

  • With one recent client, a lady had placed all her faith in her building society adviser only for us to find 5 years later that she had paid over £20,000 in up front commissions deducted from her investments and around £2,500 per year in hidden trail commission for two simple 'with profits' bond investments and it was marked in their quotation called a Key Facts Illustration as a "non advised" sale.   We immediately took over looking after her investments and cancelled the ongoing commission payments from the insurance company.
  • Trail commission is supposed to be paid for ongoing service, so if you find your returns are being reduced by trail commissions and you are not receiving regular investment advice and service then ask for your money back.  Or contact us and we will arrange for 100% of any hidden commission to be stopped.

Download FREE TEMPLATE Letter

We urge anyone who has invested money or took out a pension in the last 5 or 10 years or so to call their bank, insurance or investment company and ask for a full details of commissions paid up front but more importantly the ongoing commission.  


If you are not satisfied with the response or you find you have been paying trail commission but with no ongoing advice service you should complain and ask for a refund.   Firms may simply produce a Key Facts Document (the original quotation) that was given to you showing that the commission was disclosed in the small print but THIS IS NOT ENOUGH to justify receiving the trail commission. 

If they have been paid and have not been giving any ongoing service to you then you have a right to question why they are getting paid.  If this is the case, you should complain initially to the advising firm, you then have a right to approach the financial ombudsman service if you are not happy with their response.  If in doubt, contact us and we can give you an opinion as to whether you have a valid complaint.

Trail Commission but ONLY if you agree a service

  • Trail commission is not a dirty word as some commentators would have you believe but only provided your adviser offers ongoing service, which many decent independent advisers do offer ongoing advice and service such as with our Financial Review Service.

Did you get investment warnings before the crash?

  • Ask yourself a simple question; in the most recent Euro investment crisis or indeed the last one in 2008, did your adviser or bank contact you?  Did they make any suggestions to protect your investments by moving them to a lower risk area?  If not, you may be paying hidden commissions for a service that you are not getting and should change adviser.

Slash your fees now contact our team.

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