Ivan Massow is back with a controversial new business idea - and he is ready for a "punch-up" as he tries to pinch advisers' clients.
The entrepreneur today launches a new online service (TAKE A LOOK HERE) which, he claims, can help advisers' clients reduce the amount of future trail commission they are due to pay for advice they will not receive.
By switching their policies to Paymemy.com, Massow has pledged to rebate 80% of future commissions to customers, while keeping the rest.
It's 'no win, no fee' too. If Massow's is unable to track down the commission, "[customers] will not pay a penny".
Sound enticing? Well it may do for some of the millions of consumers Massow claims are unaware they are paying trail commission for ‘unearned' advice.
However, there are a number of major concerns we believe clients, regulators and the consumer press should have with this venture.
Is it treating customers fairly?
There is a danger customers who DO receive a genuine, ongoing advice package will be tempted to apply for a ‘discount' on the amount of commission they pay.
This could undermine the good work an adviser may have been doing for years with his or her clients. Massow's new venture does not offer advice, although it does have a referral service for customers who do need guidance.
Has Massow set up a business which will be viable for only 16 months?
The FSA has made it clear that, from 1 January 2013, any adviser who receives an ongoing payment from clients (in the form of fees via adviser charging) must provide an ongoing service. But it states it "will not interfere" with business set up prior to that date.
What remains unclear is how - or if - the regulator will monitor advisers' service levels when they continue to receive trail commission. If it does look closely at this, surely it will act against Massow for receiving trail commission (however small) but not offering advice alongside it.
Will it work?
Massow's previous venture, Massow Financial Services, was a high profile failure and many customers may feel it is not worth taking the risk of getting involved again.
Can Massow make a profit?
On its website, Massow's says it can offer to rebate commissions to clients because of cost efficiencies it can make as a business. However, to be successful the firm will need to attract a sizeable number of clients.
To get these clients, Massow must fight against the financial lethargy which has seen so many people leave their money in poorly performing plans for years.
Massow's venture may help the people who have fallen through the gaps in the system and are not receiving ongoing advice, but it could also snare many people who are getting the advice they need. The key thing is know your enemy. Read Massow's website and have your answers prepared.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation