The Financial Conduct Authority (FCA) written to firms in the UK investment platform industry to request information on how much of the interest they receive through cash and bank deposits they pass on to their customers.
The UK regulator is looking to understand in greater detail how interest on customers’ cash is treated in the investment platform market, and to understand how platform firms have considered their approach to this interest in line with the Consumer Duty.
The FCA said it has also asked some self-invested personal pension (Sipp) firms the same questions.
This comes at a time when many people are feeling the squeeze from rising interest rates and prices, so the FCA said it is “more critical than ever that they are treated fairly” when it comes to the interest they receive on cash and bank deposits held as part of their investments, as well as bank accounts.
The FCA said: “Our consumer duty requires the firms we regulate to put consumer interests at their heart. We want to see to customers are benefiting from better value across all their financial products.
“Our focus is on delivering an investments system that provides good products with value for money, supports savers to make well informed decisions, ensures strong confidence in investments, consumer protection, and ensures markets function well. This is part of that focus.
“We appreciate that this request will mean additional work for providers. However, our understanding is that they should have the information we are requesting readily to hand and it should not be burdensome for them to share this with us. We also think they will understand why we are seeking this information and how it will help in our work to ensure good consumer outcomes.”