It is the firm’s policy for the payment of interest to clients on monies held on that client’s behalf.
This policy will be kept under review at the annual Financial Planning Meeting and more frequently in the light of significant interest rate changes.
This policy will be drawn to the attention of clients and reference to it will be incorporated into the firm’s standard Terms and Conditions of Business and published on our website.
Policy
1. The firm will account to the client for interest on monies held on behalf of that client, or Trust, when it is fair and reasonable to do so in all the circumstances.
2. It is acknowledged that a fair sum of interest will not be as high as that potentially obtainable by the client depositing those funds individually and by use of accounts requiring notice to be given of withdrawals.
3. The Client Bank interest rate is the interest payable rate set at an equivalent interest rate in the market, for instant access current account monies held in readiness for use during a transactional matter. We benchmark our interest rates paid on monies held on our general client account relative to the Bank of England base rate. This rate is likely to change from time to time and the aligned rate will be kept under review. Presently our client account interest rate is set at fifteen percent of the Bank of England base rate.
4. A firm-wide de minimis rule will apply so that no interest will be payable if the amount calculated to be due is £50 or less. This de minimis level will be reviewed regularly in the light of current interest rates.
5. The rate paid by way of interest will reflect factors such as
(a) the need for instant access;
(b) the rate of interest payable on the amount held individually in an instant access account at the bank or building society where the firm’s client account is kept;
(c) the fact we are not a bank, and the client account must not be used as a banking facility;
(d) the Bank of England base rate;
6. The sum paid by way of interest will reflect factors such as:
(a) the amount held;
(b) the length of time for which cleared funds were held;
(c) the practice of the bank where the firm’s client account is kept in relation to the compounding of interest;
7. Interest will be paid from the day after the day on which cleared funds are received into the firm’s bank account. Interest will cease on the day that interest is sent out to the client.
8. Interest will be paid gross, without any deduction of tax and clients are responsible for notifying HMRC of any interest received. Interest will be paid as soon as reasonably practical following completion of the relevant matter.
9. In accordance with SRA Accounts Rules, we are obliged to ensure at all times that money held in a client account must be immediately available, unless in response to specific and individual instructions from the client. This means that any interest payable is very unlikely to be as high as that obtainable by a client depositing funds themselves.
10. Sums which are unusually large, or held for an unusually long period, warrant individual and special consideration. Time charges for setting up individual designated deposit accounts and monthly reviews will apply. For such cases, interest may not be as high as that obtainable by the client acting individually but is likely to be higher than the rate referred to above. Care needs to be taken that the costs of setting up individual deposit accounts does not outweigh any benefit to the client in terms of the interest rate applicable.
11. If the bank in which the firm holds funds should fail, the firm reserves the right to disclose to the FSCS the names and other details for clients whose money is held on the general client account in order for the client to claim compensation. The limit of FSCS protection is £85,000 on the 01 October 2023.