FCA probes platforms’ money curiosity insurance policies


The FCA has written to funding platforms and SIPP suppliers to ask them to reveal how a lot of the curiosity they obtain from money and financial institution deposits they move on to their clients. 

The difficulty has come into focus in current months as rates of interest on money deposits have risen sharply, with some banks providing deposit charges of as much as 6% or extra.

Insurance policies on how money curiosity on shopper accounts is dealt with fluctuate broadly between platform suppliers.

Some platforms, equivalent to Transact, return all money curiosity to purchasers however different suppliers, equivalent to Quilter, use the curiosity on money to cut back shopper charges elsewhere. Others have variable insurance policies, with some passing on curiosity on money and a few at the very least a part of the curiosity.

There isn’t any widespread coverage and no clear regulatory requirement though the brand new Shopper Obligation could change this with its requirement to deal with clients pretty always.


A spokesman for the FCA stated: “We wish to perceive in higher element how curiosity on clients’ money is handled within the funding platform market, and to know how platform companies have thought-about their strategy to this curiosity in step with the Shopper Obligation. We now have additionally requested some SIPP companies the identical questions.”

The FCA needs to make sure that clients are handled pretty on the curiosity they obtain on money and financial institution deposits held as a part of their investments, in addition to financial institution accounts. 

The watchdog held a gathering with banks final week and says it can have a look at different merchandise the place curiosity is paid to customers.  

The textual content of the letter to companies on their money curiosity insurance policies includes these questions:



Does your platform retain any of the curiosity it earns on clients’ money balances?

If the reply is ‘sure’:

1.    What are the present charges of curiosity you obtain on clients’ money balances? Are you able to please embody in your reply:

a)   the present common charge

a)   for those who obtain totally different charges from totally different banks (or deposit takers), a desk setting out these totally different charges

1.    Of the curiosity you earn from clients’ money balances, how a lot of this do you move on to your clients? Are you able to please embody in your reply:

a)   the present common charge

a)   in case you are paying clients totally different charges for various accounts (e.g., ISA, SIPP, GIA) and totally different (tiered) quantities held in money, a desk setting out how the quantity paid varies by account and quantity

2.       How have the above charges (coated by questions 1 and a couple of) modified during the last 18 months? Please set your reply out in a desk with a brief clarification as to why the speed modified and the influence of the change.

3.       Do you have got plans to alter the charges you pay sooner or later? In that case, please define these for us and clarify the rationale.

4.       How a lot has the agency earned in curiosity on clients’ money balances during the last 18 months. May you please set this out in a desk, damaged down by month.

5.    Does your agency apply an account charge to money held in its clients’ funding accounts? If the reply is sure, please tell us the quantity and nature of this charge (e.g., share of AUA; flat charge). If the charge varies between totally different wrappers (e.g., ISA, SIPP, GIA), please set out the various quantities in a desk.

6.    Please present a hyperlink to the placement in your web site the place you clarify your strategy to the retention of curiosity to your clients.

7.    Has the agency reviewed its strategy to the retention of curiosity within the mild of the Shopper Obligation?

8.    In that case, might you summarise the result of that evaluation?”

The FCA plans to make use of the data to determine if additional motion must be taken or if additional data is required.


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