Why ‘double-dipping’ isn’t done at Casterbridge

You might have seen recent press reports that the Financial Conduct Authority (FCA) has announced a ban on ‘double-dipping’ on client cash by wealth management companies.

What’s double-dipping? It’s the practice of firms charging fees for holding customer cash, while also keeping some or all of the interest earned on customer cash balances.

For context, back in 2023, the FCA delivered a warning to investment companies after a review found 18 of 42 firms were double-dipping.

The FCA has now confirmed it will introduce a new rule banning the practice for platforms and discretionary wealth managers. 

we’d like to make it crystal clear, we do not double dip, and we never have

First, to avoid any doubt, we’d like to make it crystal clear that Casterbridge does not double dip, and we never have. We take an annual management charge on the total portfolio, we use cash tactically, as a core part the investment toolkit. We keep cash in portfolios either to be used when target companies fall into our price range, or as a safe haven when needing to reduce market exposure. But we do not take a share of the interest on any cash held on behalf of clients.

Second, we welcome the FCA’s commitment to keeping firms accountable for how they manage client money and what fees are charged for. The consumer duty rules are something that every wealth management company should take seriously and be working hard to uphold.

If you’d like to have a conversation about how we manage your money, we’re here any time.