The Financial Conduct Authority has today (12 December) written to investment platforms and self-invested personal pensions operators to set out its concerns on the way firms deal with any interest earned on customer cash balances.
The regulator said the amount of interest earned by some firms has increased as rates have risen. It surveyed 42 firms in July 2023 and found the majority (71%) retain some of the interest earned on these cash balances, which "may not reasonably reflect the cost to firms of managing the cash". This retained interest falls between a range of 10% to 100%, at an average of 50%, while collectively these firms earned £74.3m in revenue from this practice. Divergence in Consumer Duty application could push asset managers out of UK retail market Many also charge a fee to customers for the ...
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