UK watchdog scrutinises potential overcharging by investment platforms (updated)
12/12/2023 08:23
(Adds stock market reaction in paragraph four, makes clear that
no plaforms have been named by the FCA in paragraph three)
LONDON, Dec 12 (Reuters) - Britain's Financial Conduct
Authority (FCA) said on Tuesday it was concerned about the
amount of interest and fees charged by some investment
platforms, and has written to 42 firms warning it could
intervene to ensure fair value.
The regulator said it had laid out concerns about the amount
of interest investment platforms raked in on customers' cash
balances - which has risen as interest rates have gone up - and
the practice of charging a fee for cash they hold, known as
"double dipping".
The FCA said it had told the platforms to cease this
practice. The regulator did not name any of the platforms it had
concerns about and said companies had been given until February
29 to make any changes.
Shares in major London-listed investment platforms fell
in early trading, with Hargreaves Lansdown HRGV.L sliding as
much as 9% and AJ Bell AJBA.L falling as much as 8%. Both
firms did not immediately respond to a request for comment.
"Investment platforms and SIPP (Self Invested Personal
Pensions) operators need now to ensure how much of the interest
they retain and, for those who are double dipping, how much
they're charging customers holding cash, results in fair value,"
said Sheldon Mills, Executive Director of Consumers and
Competition at the FCA.
"If they cannot make that case, they need to make changes.
If they don't, we'll intervene."
(Reporting by Iain Withers, editing by Sinead Cruise)
((Iain.Withers@thomsonreuters.com;))