10 February 2020
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Chase de Vere faced criticism over the weekend after a Times investigation revealed that staff at the financial advice giant were offered the chance to win luxury "incentives" amid concerns of high fees and a "hard selling culture".
The firm was found to be circulating league tables, comparing staff commission with that of their colleagues, while employees told the paper of the pressure they faced to generate income for Chase de Vere.
In January, the firm's top ten performers were awarded a three-day, all-expenses-paid trip to Cannes by Chase de Vere's chief executive Stephen Kavanagh at the Principal Hotel in Manchester.
Firms need to look after the interests of their customers and treat them fairly"
Staff can receive other benefits, with previous years' top fee generators taken to Sicily and this year's top earners scheduled to go to Athens in 2021.
Chase de Vere competitor St. James's Place announced last week that it would be scrapping its overseas cruises and silver cufflink rewards for its top salesmen, following similar investigations.
Similarly, Prudential axed its overseas incentives after it was fined by the Financial Conduct Authority (FCA) for pre-2013 "sales-linked" incentives, which saw its top sales people rewarded with "prizes such as spa breaks or weekend holidays abroad".
The FCA is currently investigating whether high levels of remuneration or inappropriate charging structures are leading to consumer harm.
It said: "Firms need to look after the interests of their customers and treat them fairly. This includes ensuring that they do not remunerate staff in a way that conflicts with their responsibilities to act in the best interests of their clients."
According to The Times, a £100,000 investment with Chase de Vere can cost as much as £100,000 in fees over 20 years.
Advisers at Chase de Vere are understood to take in a basic salary of between £18,000 and £65,000, with its top fee generators receiving about half the fees they earn from customers.
The firm's top earner for 2019 is estimated to have made £670,000 out of £1.3m in fees.
Chase de Vere denied the existence of a naming and shaming culture or that it used pressure-selling tactics, emphasising that it does not sell products but provides financial advice.
In response, Chase de Vere chief executive Stephen Kavanagh said: "We are disappointed that The Times has willingly misrepresented our company culture and operations. The results that we achieve for our clients and the overwhelmingly positive feedback that we receive demonstrates the quality of service provided by our advisers."
Kavanagh, who has been head of the firm for a decade, said the IFA operated in "an entirely transparent and accountable manner, ensuring that our clients are fully informed of our services and associated fees at every step".
"We have robust controls in place to continuously monitor the activity of our advisers to ensure that they, along with all of our employees, operate in the best interests of our clients at all times. Our client focused processes and quality controls ensure that we reward only those employees who are exemplary performers and we are proud to celebrate their achievements for our clients."
Chase de Vere is one of the UK's largest IFAs, managing around £10bn worth of assets.
This article was first published by InvestmentWeek, a sister title to International Investment
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