The Financial Conduct Authority (FCA) has today (12 December) written to investment platforms and self-invested personal pensions (SIPP) operators setting out its concerns on the way firms deal with any interest earned on customers’ 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 retain some of the interest earned on these cash balances, which "may not reasonably reflect the cost to firms of managing the cash". Many also charge a fee to customers for the cash they hold, known as "double dipping". This has raised concerns with the regulator and firms have been told to cease this. The FCA said it is concerned these practices "may not be providing fair value to customers and may not be understood by consumer...
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