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Can I claim trailing commission back myself?


Think about it like this: if you bought insurance or took out a mortgage, then you entered into a contract to purchase a financial product that pays an ongoing fee to an adviser. Unfortunately, you can’t just call the bank and switch it off.

And before you cry foul, if you didn’t pay for advice (as you always should), then that adviser or broker is relying on that commission to make a living.

Having said all that…

With recent changes in the law, it may be possible for an authorised financial planner to switch off trailing commission on some managed funds and super. It might also be possible to remove it completely by changing products. However, you should seek advice before you make any changes to your financial situation. And, you may find an authorised financial planner is the only person able to sort out your trail, as not only are financial companies reluctant to give out information on trailing commission, but only an authorised financial adviser or company can receive and refund ongoing commission.

Can you avoid trailing commission by going direct?

Aside from industry funds, often, no. By paying trailing commission, a bank, insurer or fund manager can more effectively cover the costs of distributing their products through channels they don’t own. They won’t bite the hand that feeds them by undercutting their ‘sales force’.

If you go direct to a bank for your mortgage, they will simply pocket the trailing commission they would have normally paid a mortgage broker.  The same goes for your insurance company – you will not get a discounted premium if you call an insurer and arrange cover yourself. And, some excellent insurers don’t deal directly with the public. If you want access to these, you should use a financial planner who will remove all the commission at set up.

You have a choice which adviser you want listed as the “servicing adviser” on your financial products. Use an adviser who will either remove or refund the trailing commission completely, or use it to provide a defined ongoing service that helps you financially.

I give one-off advice on how to deal with your trailing commission and avoid having to share it with a refund company – contact me.