14 Jul 2026 A dry document on disclosure and cash interest or a genuine change?
Retained interest on client cash has been one of the more profitable, and most contested, corners of the platform market since rates began rising in 2022. The FCA’s new consultation, CP26/24, does not overturn that business model, but tightens the disclosure and conduct requirements around it, in a way signalled for over two years. This is evolution, not revolution, but not one platforms can afford to treat as routine.
While most of the headlines focused on what the FCA labelled as ‘double-dipping’ (a phrase coined by Fundscape incidentally) in practice this changes little; platforms have already moved on. The real changes, which have the potential to make the biggest difference to consumers, are around improvements to disclosure.
How did we get here?
In December 2023, the FCA wrote its now famous Dear CEO letter to platform and Sipp chief executives with a blunt warning. Its sample of 42 firms had earned £74.3m in a single month from retained cash interest, and 61% of those firms also charged a separate fee on the same cash – double-dipping in all but name – and the FCA wanted that to stop.
But here’s the key bit. The letter set expectations rather than rules. It expected firms to review fair value assessments, stop double-dipping and improve disclosure.
What’s changed? In a nutshell, the consultation looks to turn these expectations into rules. It stops practices like double-dipping being a supervisory concern and becoming a breach. A parallel proposal, CP25/37, tightens the client-money rules themselves, so that firms must pass on interest earned unless retaining it is compatible with the Duty and they have told clients in writing. However, firms that were double-dipping have already stopped, so on this front nothing much changes.
So, what else does the consultation do?
The FCA is clear that there is nothing wrong with taking a charge to cover legitimate expenses, regardless of what part of a portfolio it covers. Nor is it prescriptive about how platforms charge that fee.
What it wants them to do is be explicit about how it discloses the fee so the client can see the value and cost of the overall service to them. Platforms have to put their cards on the table, lay out exactly what services they provide, how and how much they charge and then let the client or their adviser decide.
For that to work, the FCA also proposes three points at which disclosure must improve:
- Before a client chooses a provider, cash treatment must sit prominently alongside other fee information, including the rate the client will earn and how the firm sets it, whether that is a benchmark such as the Bank of England base rate or a value kept under periodic review.
- Clients should get a personalised estimate of any fee and likely interest on cash over the following year.
- Clients should be told what interest they actually earned and what fees they actually paid, in plain terms.
In short, none of this bans retaining interest outright. A platform can still keep some or all of the interest, provided it does not also charge for holding the cash and is transparent about the rate. Nor does it ban cross-subsidy, which has always been permitted under Consumer Duty so long as firms explain it so the client can form a fair view of the arrangement.
What it does do is force platforms to answer more difficult questions about their model and who benefits from their approach. Firstly, firms have to choose to pass on all interest and charge a fee, or retain some interest, but that only answers an internal financial and business model question. They still have to grapple with the harder question of what this arrangement is worth to the client, not the business.
Who benefits?
A platform’s relationship with its banking partners generates a benefit somewhere. If that benefit sits mostly with the platform, disclosure alone will not make it fair value. Platforms need to show the client’s side of that equation, not just describe their own. When the FCA called time on double-dipping, most platforms chose to skim interest rather than charge custody on cash assets. Why? Because it’s a huge source of revenue. Transact is now the only platform that charges custody on cash but passes the interest back in full. The net effect is that interest more than covers the fee on the cash. Where the cash balance is large enough, the interest can cover their platform fees altogether, essentially leaving customers with negative fees.
Tom Dunbar, CEO, believes the real battleground is disclosure, pointing out that even high-net-worth clients with a sliver of cash expect to know if their platform is taking a cut, and nudging advisers who use interest-retaining platforms to press them to come clean.
There is a wider point about cash too. The FCA expects the firm holding client money to weigh its Duty obligations where a balance is larger than it needs to be. For advised clients that doesn’t mean the platform going over the adviser’s head. But it does mean that the platform has an obligation to surface the balance and its cost clearly enough that the adviser can see it and act. The suitability call stays where it belongs, with the adviser, whose job is to make sure a client is not sitting in cash by accident. A platform that earns from that cash while leaving it hard to spot is not making that job any easier.
It’s back to the cards face up on the table time. Platforms need to be clear about what they do. Be clear about how much they are going to charge and when, be clear about where the charge applies. Be clear about who benefits, and ultimately be clear about why and how that service creates value.
Done properly, this is a real change to improve consumer choice, boosting engagement and participation, which benefits all parts of the industry. The consultation closes on 21 August 2026, with final rules expected by the end of the year and the cash disclosures due to bite from June 2027, ahead of the rest of the package in 2028. That leaves platforms a little over a year to work out not just what they charge, but what their answer is when a client asks who the cash was really working for.