It is recommended that any adviser or client looking to use these services conduct their due diligence beforehand. For more information on the FSCS, please refer to www.fscs.org.uk.

Inherently with a service like this there is a fee, which varies from provider to provider; whether that is a percentage fee against the deposit size on the platform or the fee is taken from the gross interest received.

Some banks, who could have market-leading rates, may also choose not to work with cash management platforms and offer their products and services directly to the client via their in-house wealth management team. 

CEO letter from FCA to banks using deposit aggregators

In a letter dated April 14 2021, in brief, the Prudential Regulation Authority and the Financial Conduct Authority highlighted the possible risks associated with the growing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to reduce these risks.

Although deposit aggregators are a relatively new concept, we are pleased to see the recognition they are receiving from the FCA and it can see the benefits to the clients who are, at all times, the main focus for platform providers in the industry.

We always believe that regulation is a positive move so that full protection is guaranteed for all involved. But we also see that over-regulation can disrupt the potential for innovation.

It is innovation that also advantages clients who want to benefit from financial products and services that can help them boost their financial health, and support their future financial plans.

We whole-heartedly agree with the FCA that there is no need to “stifle competition or innovation... and are keen to work with firms to ensure that regulatory objectives are not compromised by the adoption of new business models”, as discussed in their letter, and welcome the finalised guidance on which we will provide feedback.

Marcus Neville is business development manager at Akoni