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Concerns grow at interest gap

Mackay: ‘Not disclosed effectively’
Mackay: ‘Not disclosed effectively’

Panellists slammed providers which making profits from the interest paid on cash accounts held on platforms.

Work carried out by Platforum reveals that several platforms get a higher interest rate on cash accounts than they pay to clients.

Managing director Holly Mackay said: “The interest taken on cash accounts is an area we have looked into and we have found that some platforms are on the take. It is not disclosed effectively – it will be on page 249 in the small print.”

Evolve Financial Planning managing director Antony Williams said the issue was not being addressed properly by some platform providers.
He said: “The interest taken on cash accounts really is a concern. It is the client’s money. Platforms are using clients’ money to make money themselves.”

The FSA highlighted the issue over interest on cash accounts in its platform RDR discussion paper in March. The paper states that a platform should “clearly and prominently disclose” to customers where it is retaining a proportion of the interest payable on cash accounts.

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