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FCA trail commission

Journalist: Sonia Rach

ended 30. March 2026

The FCA said reviewing the rules on trail commission was an important part of ensuring regulation stays up to date.

Trail commission is a recurring payment to advisers by product providers over the lifetime of an investment product. It was banned in 2012 with the roll out of RDR.

However, the regulator allowed for the payments to continue for products sold before this time.

Since 2020 the decline has slowed and remained at 12 per cent (totalling £674mn) in 2024.

Some have already begun questioning this, especially as it's been declining since 2012. 

But with legacy products under scrutiny, do you think ambulance chasers may jump on this and come out?

I'd love to know your thoughts.

Thanks 

Sonia

 

3 responses from the Newspage community

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Graham Nicoll
Financial Planner, Chartered FCSI at NCL Wealth Partners
Trail commission continuing on legacy products is hard to justify as it lacks transparency and means clients continue paying for advice they may no longer be receiving or be aware of. Additionally clients may be paying twice if advisors are also charging an ongoing advice fee, which they are likely to be doing.

There may also a disincentive for advisors to move clients to new investments that may deliver better net of fee returns for the same risk level.

I do think claims companies will circle. Where there is opacity and historic charging structures, there is an opportunity, which feels similar to past areas where consumer awareness lagged behind industry practice.
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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
Yes, I do think there is a risk that this attracts claims-chasing behaviour, because whenever legacy charging structures come back under the spotlight, there is always the danger that nuance gets lost and the whole thing gets reframed as a scandal before the detail is properly worked through. That said, the FCA is right to ask the question. If trail commission is still being paid years later, firms need to be able to explain what ongoing value, if any, is actually being delivered for it. From an adviser perspective, the key issue is not panic, it is clarity. If the market gets the message that all trail is automatically unfair, you create noise, opportunism and retrospective pressure very quickly. So yes, ambulance chasers may well sniff around this, especially where clients do not fully understand what they have been paying for, and that is exactly why the regulator needs to tread carefully and communicate clearly.
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Rohit Parmar-Mistry
Founder at Pattrn Data
Trail commission is a legacy hangover that keeps draining value long after the advice has been delivered. The FCA is right to revisit it, because the current setup quietly rewards inertia: providers keep paying, advisers keep receiving, and consumers rarely see a clear line of sight to what they are funding.

On the ‘ambulance chasers’ point, the bigger risk is not a sudden wave of opportunism, it is that firms have left the data and customer communications messy. That is what turns a policy review into a claims narrative. If you cannot evidence suitability, consent and ongoing service for pre‑2012 books, someone else will tell that story for you.

The smart move now is a proactive clean-up: map where trail is still being paid, test whether customers understand it, and tighten governance on legacy products before the FCA tightens it for you. The question is: which firms can honestly explain, in plain English, why any given customer is still paying this fee today?