FCA Bans Investment Platforms From 'Double-Dipping' on Your Cash Balance

The Financial Conduct Authority has moved to stop investment platforms charging customers fees on their uninvested cash while also keeping the interest earned on it — a practice regulators are calling "double-dipping." A review found 18 of 42 firms examined were doing exactly this, according to reporting on the FCA's findings.

What was happening

When you hold cash in an investment or SIPP account — waiting to be invested, or sitting there between trades — the platform typically earns interest on that balance from the bank it's deposited with. Many platforms also charge customers a separate cash handling or account fee on top. The FCA's concern was that some firms were doing both: pocketing the interest and charging a fee, effectively getting paid twice on the same pot of money.

The regulator has also been pushing platforms toward the Consumer Duty standard, which requires fair value across every part of a product, not just the headline charge.

Wider disclosure crackdown

This sits alongside a broader push on transparency. A separate FCA review found only 6% of presale disclosure documents met plain English standards, with all 172 documents reviewed falling below GCSE-level readability — meaning the paperwork many investors are handed before they commit money is, by the regulator's own assessment, too hard to understand.

The FCA has also flagged that pension firms need to do more for savers stuck in older, more expensive unit-linked pensions, pushing providers to cut charges and improve returns rather than leaving legacy customers on outdated deals.

How this compares internationally

The US doesn't have a direct equivalent rule, though the SEC's Regulation Best Interest requires brokers to act in a client's best interest on recommendations, which has driven some scrutiny of cash sweep programmes at major brokerages. In Australia, the Australian Securities and Investments Commission has similarly investigated cash management fees on super and investment platforms. The UK's move puts it roughly in step with a global trend toward scrutinising "hidden" cash-related charges.

What it means for you

If you hold cash within a stocks and shares ISA, SIPP or general investment account:

• Check your platform's fee schedule for a separate "cash management" or "account" fee.
• Ask (or check the small print) whether the platform also earns and retains interest on that same balance.
• Compare against competitors — Which? regularly reviews platform charges and is a useful independent check.
• If you're holding large uninvested balances for a long period, consider whether that cash would be better in a dedicated savings account or cash ISA earning you the interest directly.

Key Numbers

• 18 of 42 firms reviewed were found double-dipping on cash fees and interest
• 6% of presale disclosure documents met plain English standards
• 172 documents reviewed in the FCA's readability study

Sources

• FCA: News
• Traders Union: FCA tightens UK investment disclosure rules and bans fee 'double-dipping'
• FCA: Consumer Duty
• Which?: Compare investment platforms

Educational content only — not financial advice.