Cash should not be exempt from cost rules

For a start, advisers are now having to send out details of how much their clients have paid on their investments every year. The same goes for platforms and asset managers.

But what is good for the goose is not always good for the gander.

For example when it comes to cash that is held on platforms, a company like Hargreaves Lansdown is perfectly within its rights to claim that it ‘does not charge’ for holding cash, despite a chunk of the interest that accrues being kept from its clients at rates determined by the company itself.

Given the fact most people in the UK place the majority of their savings in cash, it seems to be the asset that most of us trust above all.

But the fact Hargreaves Lansdown generated £33m in revenue from its clients’ cash accounts would seem to contradict the idea that it ‘does not charge’ for this service.

For the sake of clarity – and to avoid an email from its press office – Hargreaves Lansdown is far from alone in using this practice.

But this, at best, is far from explicit. If Mifid II is meant to herald a bright new dawn of transparency then the cleansing rays of the sun should reach every nook and cranny of a client’s holdings.

The fact some of this just happens to be in cash should not be a loophole. Holding cash is a perfectly legitimate investment strategy that many retail investors and fund managers use. It is an asset as much as gold, US equities and Japanese bonds.

In fact, given the fact most people in the UK place the majority of their savings in cash, it seems to be the asset that most of us trust above all.

Despite the grumbles, transparency on costs and charges is a good thing: advisers, platforms and fund managers who price their services fairly and clearly have nothing to fear.

damian.fantato@ft.com