This refers to an ongoing commission and it is usually
paid on single premium investments such as ISAs, Unit
Trusts/OEICs and PEPs. However it can also be paid on
investment bonds depending on how the original investment
was set up so you would need to check this. Additional
investments such as Enterprise Investment Schemes (EISs)
and Venture Capital Trusts (VCTs) can also pay a trail
commission. This depends on the individual companies.
This commission is disclosed at the same time as initial
commission (as stated above) but you are not then kept
informed as to the amount paid each year. This commission
is expressed as a percentage and is based on the size
of your fund.
Single Premium Investments and trail commission
This is the easiest part of making your investments more
efficient. Most investment houses pay trail commission
and allow investors to transfer this trail commission
over to a new broker. This is usually a very simple operation
that does not alter your investments in any way and is
referred to as a ‘Change of Agency’. It simply
transfers the servicing of your investment, along with
the trail commission, over to ourselves. We then refund
you the commission.
Unit Trusts, OEICS and PEPs
Not every investment company pays trail commission and
the exceptions are shown below.
Companies that do not pay trail commission
AIB Govett
Johnson Fry (on some products)
Nvesta (formerly Eurolife)
M&G (on some products)
HSBC, Scottish Amicable (on some products)
Scottish Widows (on some products)
In addition there are some investment houses that will
not transfer the trail commission even if the client specifically
requests it. These companies are shown below.
Allied Dunbar
Dresdner
Framlington
Legal and General
A table showing the money that you can benefit from is
shown below. This table is based on an annual growth rate
of 5% after charges with trail commission of 0.5%p.a.
Year
Fund
Amount £
Commission to
Discount Club client
£ p.a.
Fund
Amount £
Commission to
Discount Club client
£ p.a.
1
10,000
50.00
50,000
250.00
2
10,500
52.50
52,500
262.50
3
11,025
55.12
55,125
275.60
4
11,576
57.88
57,881
289.40
5
12,155
60.77
60,775
303.90
6
12,762
63.81
63,814
319.10
7
13,400
67.00
67,004
335.00
8
14,071
70.35
70,355
351.80
9
14,774
73.87
73,872
369.40
10
15,513
77.56
77,566
387.80
Cumalative
10 Year Total
£628.86
£3,144.50
EISs and VCTs
The above table is relevant to these forms of investments,
and the level of trail in most cases is the same as above.
As simply ‘Change of Agency’ form
needs to be completed to set this process in motion.
Investment Bonds
The operation to benefit from trail commission on investment
bonds is identical to that of unit trusts etc. To receive
the trail commission it is a simple matter of transferring
the servicing of your policy, along with the trail commission,
over to ourselves. We then refund you the commission.
The following companies allow investors to transfer the
trail commission on their investment bonds.
AMP NPI
AXA
Eagle Star
Friends Provident
Legal and General
Liverpool Victoria
Norwich Union
Royal and Sun Alliance (require their own form completed)
Scottish Amicable
Scottish Equitable
Scottish Widows
Standard Life
The following companies will only transfer the trail commission
after the investment has been running for five years.
Clerical Medical
Scottish Mutual
Scottish Provident
Finally the following companies will not allow the transfer
of trail commission even at the express instructions of
the client.
MGM Assurance
Prudential
Skandia
A table showing the money that you can benefit from is
shown below. This table is based on an annual growth rate
of 6%p.a after charges with trail commission of 0.5%p.a.
