Jupiter sued for ‘breach of contract’ over trail commission removal

At least one adviser firm has taken legal action against Jupiter Asset Management, alleging ‘breach of contract’ over the removal of trail commission, Money Marketing understands.

The parties have since reached a settlement of £2,265.

Jupiter has recently undertaken a review of a small number of remaining clients invested in legacy trail commission share classes.

It transferred relevant investors’ holdings from the L Class to the J Class – a standard ‘clean’ share class that pays no trail commission – on 26 June 2026. Trail commission payments to affected firms have ceased.

In a letter seen by Money Marketing, dated 12 March 2026, Jupiter stated that this decision had been made in response to “ongoing regulatory expectations and supervisory engagement relating to legacy commission-bearing share classes”.

It said: “As part of its ongoing supervisory work, the FCA has asked asset managers, including Jupiter, to demonstrate clear progress in transitioning investors out of commission-bearing classes.

“To align with these regulatory expectations and to ensure our products continue to deliver fair value, we are undertaking a review of the small number of remaining clients invested in legacy trail commission share classes.

“Addressing these legacy arrangements is important to avoid potential regulatory challenge and ensure ongoing compliance with [the] Consumer Duty.”

Jupiter noted that through the Assessment of Value (AoV) framework and the Consumer Duty, the regulator has continued to place “strong emphasis on ensuring that firms move clients away from legacy share classes that may not represent value”.

Ed Dymott: Trail commission isn’t the problem

Although the FCA is reviewing the impact of legacy trail commission on clients, it said in its latest consultation paper that it was not proposing any changes at this stage.

This position was also confirmed in a Right to Know request to the regulator, in which it said: “Subject to certain conditions in COBS 6.1A.4AR, FCA Handbook rules permit legacy trail commission to be paid on advised products bought before 31 December 2012, and we have neither made nor consulted on any changes to those rules.

“Our recent consultation on Simplifying the Pensions and Investment Advice Rules includes a discussion chapter on legacy trail commission, which is intended to explore and better understand the market impact on firms of legacy trail commission.

“This is not a set of proposals but an exploration of the potential impacts of legacy trail commission arrangements and a discussion on whether further policy intervention may be needed, and if so, what shape that could take.”

Jupiter declined to comment.