Investments  

Maximise clients’ cash – Deposit Sense

Maximise clients’ cash – Deposit Sense

Cash needs to be taken more seriously as advisers could be guilty of negligence if they leave money lying dormant in a low-interest account, the director of Deposit Sense has warned.

Paul Alkins, who set up the savings platform for advisers in 2010, said: “Cash is the only asset that every single person in the world, let alone in the UK, needs to have daily. It is the main goal of every financial adviser, to maximise their clients’ lifetime access to cash.”

Speaking after the FCA carried out a market review of the cash savings market, Mr Alkins said he believed the FCA should have told advisers to analyse their clients’ requirement for cash and that they should show their consumers how to maximise the value of their cash.

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He said the FCA should be concerned about financial advisers undertaking a full analysis of a client’s cash holdings before undertaking any investment advice, adding that it would be professionally negligent for an adviser to leave a client’s money in a dormant bank account.

Mr Alkins compared the performance of an effectively managed portfolio of deposits against the performance of the FTSE 100 Index since 2000.

Mr Alkins said: “No matter what regulated solution a financial adviser provides to their clients, there will always be cash held on deposit.

“The value of this cash must be maximised and protected for the financial adviser to clearly demonstrate they are giving best advice.”

A spokesman for the FCA said: “The market review was a study of the cash savings market, looking at those firms that offer cash saving products.

“It did not consider investment advice, as that would be a separate piece of work looking at a different market.”

Amount invested £10,000FTSE 100 Index return January 2015Cash return January 2015
Invested or deposited in January 2000£9,447.96£17,126.15
Invested or deposited in January 2005£13,599.80£13,225.00
Invested or deposited in January 2010£12,095.83£12,779.00