Investment platforms across the UK have been asked how much interest they are making from cash deposits and whether this is passed on to their customers.
The Financial Conduct Authority (FCA) wrote to firms today (July 13) to ask for the information.
It comes as the body prepares to roll out new consumer duty regulations at the end of this month which dictates that firms should put customers’ needs first.
In a statement, an FCA spokesperson said: “We are looking to understand in greater detail how interest on customers’ cash is treated in the investment platform market, and to understand how platform firms have considered their approach to this interest in line with the consumer duty.”
As well as asking firms in the investment platform industry, the FCA has put the same questions to some self-invested personal pension (Sipp) firms.
It is understood the FCA has also met with banks and is looking at other products where interest is paid to customers.
While the request is expected to create additional work for platform providers, the FCA believes the information should be readily available to share.
The request comes after concerns about firms not passing on interest to their customers as the Bank of England has raised base interest rates many times in the past year.
Earlier this year it was revealed that Hargreaves Landsdown had not been passing on rate rises to customers leading to debates about what the right thing to do was.
The issue of interest profits being passed on to customers has been a hot topic in the realm of banks and building societies too.
In March this year, the chair of the Treasury committee wrote to the FCA asking what it is doing to ensure banks are passing interest rises onto their customers, after a number of banks were criticised.
In June, the FCA said it will require the largest banks and building societies to explain the pace and extent of how they pass through base rate changes to savers.
tara.o'connor@ft.com
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