Stock brokerage firms have faced renewed scrutiny over low-interest rates offered to investors on their cash deposits.
Though base interest sits at 5.25% in the UK, wealth platforms have been slated for often offering in the region of just 1% to 2% on uninvested funds.
According to the Evening Standard, Hargreaves Lansdown, Abrdn interactive investor and AJ Bell penned combined revenues of £444 million last year through the practice.
This is on top of the hefty commissions that such platforms often charge investors on trades.
Given new consumer duty rules introduced by the Financial Conduct Authority over the summer requiring that the likes of banks act in the best interests of customers, the regulator already wrote to wealth managers last month over the issue.
“We want platform firms to help consumers invest with confidence,” the FCA wrote.
“We expect platform firms to consider how the economic environment, including rising interest rates, could impact the outcomes consumers get from their services.”
AJ Bell, which the Standard said made £55 million from cash deposits last year, reassured it was looking to provide “more disclosure in this area” in the future.
Hargreaves Lansdown said: “We tell clients when they are holding too much cash for too long and encourage them to use active savings.”