Advising on cash savings – How technology can add value to your service

There was a time when you could walk into your local branch and get double digit returns on your cash savings. Chances are, many of your clients can remember the base rate being as high as 17%.

It seems those days are long gone. But that shouldn’t mean clients give up on getting the most from their cash. The unfortunate truth is that most don’t bother to find a good rate. In fact, UK savers hold around £33 billion in cash accounts paying no interest at all.¹

The good news is, technology exists that makes it remarkably simple for advisers to get their clients’ top tier rates by helping them manage their cash savings.

An easy win

Most clients feel they could (and probably should) be making their cash work harder. But they often:

• Feel powerless and frustrated by low interest rates.
• Lack awareness about the way savings rates can change after they open an account.
• Do not feel confident about shopping around and switching to a better deal.
• Feel it’s just too much hassle to switch and manage multiple accounts for such small gain.

But what if you could take all the hassle away from them?

You wouldn’t dream of managing your clients’ cash manually – you simply don’t have the time.

But with a cash management service it’s a different matter. You can find clients a top-tier rate and maximum FSCS coverage with minimal hassle to you and your client. It’s an easy way to add value to your service.

Cash management: how it works

Clients choose an account based on how long they want to deposit for. The cash management service allocates your client’s money to one or more banks that offer a competitive savings rate. Money is allocated in £85,000 instalments, starting with the bank offering the highest rate. This way your client has full FSCS coverage on each instalment.

Since the service works with so-called challenger banks, often these rates will be higher than the best rates on offer from the big high street banks your client will be familiar with.

Once the term is up, your client can choose to deposit the money again at new rates.

As an adviser, you can set all this up for clients with one simple online form. You don’t have to open multiple accounts at lots of different banks.

Don’t underestimate the opportunity

There’s an estimated £1.3 trillion stashed away by UK households, £165 billion of which is held in fixed-term deposits.

This isn’t surprising. Every client holds cash. And most would consider it their most important asset – a kind of financial security blanket.

Some clients will hold a lot of cash. That might be a client who’s overweight in cash but has a low risk appetite, or a client with a short time horizon. For these types of clients, the burden of getting a good return on their cash is greatest.

So there is a big opportunity. And by advising clients on their cash, you can add value to an asset that’s extremely important to them without adding to your workload.

Plus, you may end up with a better idea of their overall position, making this a good starting point for advising on other investments.

Important information

Octopus Cash is offered by Octopus Co-Lend Ltd., which is authorised and regulated by the Financial Conduct Authority (reference number 722801). Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 08913299. Octopus Cash is not regulated by the FCA. Octopus Cash is managed on a day to day basis by Octopus Institutional Deposits Limited (Company registration number 10163532). CAM008696