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FCA stresses client money protection priorities

FCA has written a Dear CEO letter to firms that provide non-discretionary investment services.  It notes that clients may have rebalanced their portfolios to mitigate volativity during the pandemic, which has resulted in firms holding more, sometimes significantly more, money in their client money accounts. FCA says the relevant senior manager must consider whether firms need to hold client money balances that are unlikely to be reinvested, or whether it would be in the better interests of the client to place them with the client’s own current or savings account providers.

FCA expects firms to communicate to clients about increased balances, and transfer them if it is in the client’s better interests to do so.

Emma Radmore