The senior consultant for Edinburgh-based consultancy The Lang Cat, said the regulator had been concerned about the use of UTDs for client money for “quite some time”, so the new rules on client assets were “no surprise”.
She said: “Self-invested personal pension and Isa managers can still use UTDs, and these are the products people are most likely to be using to hold cash in for the longer term.
“Everyone can still use UTDs with a term of up to 30 days and breakable deposits of any term. Some clients may end up marginally worse off in interest rate terms, but the real losers seem more likely to be any businesses using UTDs to maximise their overall margin on client money interest.”
Ms Lynn’s comments came as the regulator published two papers on client assets. One was a policy statement, PS14/9, Review of the Client Assets Regime for Investment Business, which was a 252-page documentation of the feedback and final rules from the 2013 consultation. The other was a 22-page consultation on how client money held in Isas, especially on a platform, should be treated. The deadline for that consultation is 25 June.
Danny Cox, head of financial planning at Bristol-based Hargreaves Lansdown, said: “Looking after clients’ money is the most important thing platforms do and investors should always choose a provider who is financially strong, well run and well capitalised. This is important work by the FCA to protect clients’ interests and we will be responding to the consultation with our views in due course.”