• Simon Merchant, Partner at Flagstone – Empowering SMEs, Charities, Wealth Managers & HNWIs to earn more interest income at Flagstone Investment Management


• 20.05.2019 12:45 pm

Simon Merchant

Currently Partner at Flagstone with responsibility for technology and operations.

Flagstone's secure online cash deposit platform gives Companies/SMEs, Charities, Wealth Managers, HNW Individuals and Trusts access to more than 450 deposit accounts on completion of a single application, empowering them to earn more interest income and reduce risk through diversification and greater utilisation of the protection provided by the Financial Services Compensation Scheme (FSCS).

Can you please share more information about Flagstone Investment Management?

Flagstone empowers clients to earn more interest income, reduce their risk exposure and eliminate the hassle involved in opening and managing savings accounts. We’re revolutionizing customer experience and redefining successful outcomes for consumers in the cash deposit market.

When we created Flagstone in 2013, we wanted to provide customers with a means of overcoming the challenges and frustrations that were increasingly prevalent in the savings market. Evolving regulatory demands on banks, in terms of customer due diligence, were making account opening processes more complex and for consumers, this meant that opening new deposit accounts and transferring the cash could take weeks or even months. This inefficiency resulted in consumer inertia, meaning that customers’ deposits were increasingly placed with just one or two banks, attracting a sub-optimal rate of return, with overly concentrated risk exposure. Research published in March (by ThisIsMoney) revealed that a staggering £166 billion of personal deposits continue to languish in accounts paying 0%.

To provide consumers with a technology-led solution to meet this challenge, we created a secure online platform which enables individual, corporate and charity clients on completion of just one application to compare hundreds of rates from 30 banks, and then open as many accounts as they require in just a matter of clicks.  The platform puts clients in control of their cash, providing them with access to market-leading and exclusive rates from this growing panel of banks, regular new rate alerts, consolidated reporting, and a daily accrued interest feed to ensure that their cash is working as hard as possible for them, now and in the future.

What is the Cash Deposit Platform? Why is it considered as the largest?

We developed the cash deposit platform to be a simple, safe, scalable way for clients to generate more interest income, reduce their risk exposure and eliminate the hassle that would normally be associated with researching and opening deposit accounts.

The platform’s ‘portfolio builder’ tool (pictured below) empowers clients to easily identify and select the deposit accounts which meet their needs - encompassing instant access, notice accounts and fixed term deposits of up to five years in Sterling, Euros and US Dollars. The client can access the T&Cs for any of the accounts and review objective analysis of the banks providing them, before selecting, opening and funding one or more accounts with just a few keystrokes.

After the initial account opening process, all execution is electronic and there is no requirement for any further paperwork, irrespective of how many accounts are opened with different banks. Accrued interest can be monitored on an ongoing basis and at the end of each month, clients receive a consolidated statement for all their accounts with an annual summary also provided to assist them with their tax returns.

Flagstone is authorized and regulated by the Financial Conduct Authority (FCA) and all deposits placed with onshore UK banks on the platform benefit from the same Financial Services Compensation Scheme (FSCS) protection as if the account had been opened with those banks directly.

Since 2015 Flagstone has transmitted more than £3bn in deposits and we currently provide clients with a choice of over 550 accounts from a panel of 30 banks making Flagstone the UK’s largest cash deposit platform by a considerable margin.

What can you tell more specifically about Anti-bribery & Corruption?

As a regulated company, Flagstone has implemented policies and procedures to ensure that we comply with all legal and regulatory requirements, including in respect of Anti Money Laundering. We work closely with our banking partners to ensure that our processes meet all of their needs. Importantly this means that on completion of a single Flagstone application, a client can then access all of the accounts provided by the extensive panel of banks on the platform.

How does the platform work for Individuals and Banks? What are the main features?

The platform provides individual savers and joint account holders with access to market-leading and exclusive interest rates. Before coming to Flagstone, most clients are earning between 0% and 0.10% on their cash deposits. Within 48 hours, clients can be earning 12 times as much from a portfolio of accounts that they have created on the platform, which thanks to its diversification also provides them with FSCS (Financial Services Compensation Scheme) protection in multiples of £85,000 (and £170,000 for joint account holders) for each account held with a different bank. For many of our clients, this ability to diversify their exposure and increase the proportion of their cash that is protected by the (FSCS) is actually a greater priority than securing enhanced interest income.

For banks, joining the Flagstone platform gives them access to a valuable source of deposit funding, tailored to meet their specific requirements in terms of currency, account type, and client profile. Importantly, we don’t charge banks to join the platform, so for the client, our charges are clear and transparent, whilst for the bank, the platform provides a zero-cost solution that delivers real value.

What can we expect in the near future?

We are partnering with new banks on a monthly basis and adding new and improved rates to the platform weekly.

Flagstone is already the exclusive cash deposit platform for clients of St. James’s Place, Quilter Cheviot, Tilney Group and many other leading wealth management firms. In the coming weeks and months, we look forward to announcing that the platform has been adopted by a number of other significant financial advice companies and networks.

We will also be building out our proposition in the next few months to provide personal clients with access to a range of term deposit accounts from a panel of UK banks with a reduced minimum opening balance of just £50,000 rather than £250,000, enabling us to deliver positive outcomes for thousands of more clients.