In a three-part series with IFA Magazine, Flagstone‘s Head of Relationships and Business Development, Claire Jones explores how using Flagstone can help advisers be more efficient whilst delivering real benefits for their clients’ cash.
Previously, Claire highlighted who Flagstone are and what they can do for advisers and their clients. In this, our third and final interview, we ask: “Why now?”
Says Claire: “Last year, the UK economy proved to be one of the most challenging in decades, with inflation levels unseen since the 1980s. In response, interest rates have reached their highest point in 14 years.
“With the threat of recession still potentially looming, investors are looking closely at both inflation and interest rates. Although UK inflation still stands in double digits, many experts believe it has now peaked. However, even with the Bank of England base rate currently standing at 4%, further rate hikes may be forthcoming in the months ahead to prevent inflation from becoming rooted in the economy. Of course, this environment represents a considerable concern for many, especially borrowers and people with expiring fixed-rate mortgages. They will have been watching in horror as interest rates increased so dramatically.
“However, one positive of higher interest rates is that it gives cash clients the opportunity to maximise their income interest.
“Many advisers’ clients will have cash deposits sitting idly in accounts earning almost zero interest. By taking advantage of the current climate, advisers and clients could now make cash an integral part of an efficient savings portfolio – one that helps to preserve the value of their cash holdings against inflation.
“With inflation peaking, we believe now is the ideal time to switch to better savings deals and avoid missing out on higher interest income. By using Flagstone’s cash deposit platform, clients can access hundreds of savings accounts – including market-leading and exclusive interest rates – in one convenient place. As well as removing the legwork of opening multiple savings accounts, our platform allows users to move their cash around quickly and easily, so they can keep on top of – and access – better rates as soon as they become available.
“Another problem we help overcome is the inertia that often surrounds cash. Inertia becomes an issue for advisers and their clients for several reasons – including loyalty and lack of awareness. Some people will stay with a bank for their entire lives. It’s easy, familiar and comfortable, so people are unlikely to dig deeper. But will it offer them the best interest rates on their cash savings? Even advisers can sometimes be unaware of the wider options, meaning cash can fall off the radar during investment conversations.
“Another reason is that people are increasingly living ‘time-poor’ lives. Even those who know they can get a better rate elsewhere may lack the time to thoroughly research the bank or products on offer. When you also factor in the hassles often involved when switching savings accounts, it’s little wonder that people prefer to stick where they are rather than move to a different account, even when they could get better returns.”
Advisers may go through a significant part of their career without using a cash deposit platform such as Flagstone. However, with inflation at unprecedented heights and interest rates continuing to rise, now appears to be the perfect time for advisers to dip their toe into the technology, and ensure cash becomes a valuable part of clients’ broader savings portfolio.
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Claire Jones joined the Flagstone team as Head of Relationships & Business Development in 2020. With over 15-year experience in the financial industry, she currently leads the elements of the business to support financial advisers and wealth planners to improve their clients’ holistic experiences in this sector, builds and creates new relationships with key strategic partners and is an ambassador for excellent client service.
