Platforms are in discussions with banks and building societies in a bid to resume offering fixed-term deposit products after FCA rule changes forced a suspension on some cash deposit products.
Earlier this year updates to client money rules from the FCA placed restrictions on unbreakable fixed-term deposits, but it was proposed that a carve-out would allow the cash savings product to be offered inside a tax wrapper.
The carve-out was proposed “given that consumers may wish to hold money in unbreakable term deposits within their Isa wrapper”.
The FCA later U-turned, prohibiting the carve out.
It prompted platforms including James Hay and Ascentric to withhold new cash investments into term deposits.
James Hay marketing director Chris Smeaton says: “Providing access to a range of cash accounts is one of the things advisers tell us they really value about our platform. That’s all the impetus we need to work with the banks to find a workable solution that fits within the new rules. We’re hopeful we’ll be able to announce what that’ll look like in practice in the near future.”
Ascentric marketing director Mike Morrow says: “Following the most recent policy statement on client assets from the FCA, specifically guidance on “breakability”, we were forced to remove FTDs from the platform from all but one deposit taker.
“We had hoped that we would be able to find a solution to this breakability dilemma with other deposit takers, by them agreeing that clients could potentially break with a penalty but this hasn’t happened yet.”