Five major fund groups have confirmed they have turned off trail commission on reinvested income, even if advice to reinvest was given before the retail distribution review (RDR) deadline.
Schroders, M&G and Artemis said they have stopped the payments, joining Henderson and Jupiter, which said at the end of 2012 that commission on reinvested income would stop.
Under the RDR rules, commission is still allowed to be paid on reinvested income if the advice was given before 31 December 2012.
The five managers all employ fund administrator IFDS, and a source said implementing systems to cope with the commission payments would have cost £120,000.
Richard Clarke (pictured), co-director of Altrincham-based Chartwell Financial Services, said: ‘IFAs could lose anything up to 10% of their income and it could take them time to realise that.’