The Lemon Fool

For anyone not familiar with Cavendish, they have offered VCTs on a different charging model to other non advisory intermediaries; charging a flat fee on each VCT purchase but returning all renewal commission less an admin charge. Particularly after the demise of Club Finance, there was sometimes a deal size where they were the most cost effective option. I haven’t used them regularly, but on a couple of occasions their “jam tomorrow” approach has proved attractive.

They were taken over by Fidelity last year. They have just written to me reporting that they are withdrawing from the VCT market. So far, just disappointing.

Much more iniquitously , they are proposing to stop rebating commission on past purchases as well. At least they are open about the consequences – they intend to pocket my commission.

I’m considering my next steps. Is anyone else in a similar position?

Like you, I used Cavendish to subscribe to some of the VCT offers between 2015 and 2019. Apart from offering a reasonably efficient service, one of the attractions was the annual rebate. They said in the letter that they would do one more rebate in June and after that the commission will be retained by Cavendish. The reason given is that they don't have the manpower to administer the rebates - that is pretty pathetic. The unilateral decision to change the agreement does not reflect well on the company when one of the features of their service was the annual rebate of commission, typically for 5 years. So in effect they are helping themselves to my rebates for the next 2 to 3 years. It is not a huge amout of money but I don't like their approach on this. I shall write to the company to complain.

No skin in this game, but I'd've thought you might reasonably seek to negotiate a one-off payment for them to buy themselves out of their obligation. Perhaps a fair blunt-instrument approach would be to treble the payment to you this summer in full and final settlement?

If they offer nothing, I'd've thought you'd have a pretty clear case to take to the Ombudsman.

As a result of the feedback from clients (majority negative, I suspect), Cavendish has decided to maintain the annual trail commission rebate. The catch is that they are going to push up the 'administration fee' per each VCT per annum from £10 to £50. The size of my VCT investment is such that I get an annual rebate of around £40 to 80 for each VCT, so after the £50 deduction and tax, most of my rebate will be wiped out. You give it with one hand and take it away with the other. Not very impressed with Cavendish.

FATKEN wrote:Not very impressed with Cavendish.

If I understand the situation correctly this is not a fault of Cavendish as they have not been in control since November 2020. It is a fault of Fidelity, one of the world's largest asset managers. I recall in the early days of PEPs that Fidelity twice suddenly stopped offering various types of PEP and told their customers to transfer elsewhere. I don't think Fidelity have ever had the slightest concern for their customers.

Kidman wrote:If I understand the situation correctly this is not a fault of Cavendish as they have not been in control since November 2020. It is a fault of Fidelity, one of the world's largest asset managers. I recall in the early days of PEPs that Fidelity twice suddenly stopped offering various types of PEP and told their customers to transfer elsewhere. I don't think Fidelity have ever had the slightest concern for their customers.

Indeed , I closed my account and dealings with Fidelity some years ago.