Impact of Cash Interest Rates on Client Acquisition

This report presents findings from Transact's research on the influence of current cash interest rates on financial advisers' ability to attract new clients. The survey indicates that 54% of advisers believe that the cash interest rate of 4.74% per annum, as of August 2024, plays a significant role in client acquisition. The report outlines how cash interest rates can offset platform charges and help protect savings from inflation. It also discusses the implications of the Financial Conduct Authority's Consumer Duty, which discourages double-dipping on cash holdings and emphasizes the need for transparency in fee communications. The research highlights that 83% of advisers are aware of the necessity to disclose cash interest charges in client cost illustrations. Furthermore, it notes that linking portfolios can reduce platform charges, with 93% of advisers discussing tiered discounts for family-linked portfolios with clients. Overall, the findings suggest that fair cash interest rates and transparent communication are crucial for attracting new clients.