Safeagent has welcomed proposals from the Government to ease the long-standing difficulties faced by lettings and property management firms in securing pooled client accounts (PCAs).
The UK’s largest not-for-profit accreditation body for lettings and management agents described the move as a “commonsense” step that could remove a significant barrier to entry for new firms and reduce operational pressures on established businesses.
The changes, outlined in HM Treasury’s consultation on Improving the Effectiveness of Money Laundering Regulations, will remove the link between PCAs and simplified due diligence under existing money laundering rules.
Instead, new PCA requirements will be written directly into the regulations, enabling financial institutions to offer such accounts under a wider range of circumstances.
WITHOUT WARNING
For years, many agents have struggled to open PCAs, while some long-established firms have seen their accounts closed without warning.
These accounts are essential for holding multiple clients’ funds securely and are a prerequisite for membership of government-approved client money protection (CMP) schemes.
Without CMP, agents risk trading illegally and could face fines of up to £30,000 from local trading standards.
COMMONSENSE MEASURES
Isobel Thomson (main picture), Chief Executive of Safeagent, says: “For some time we have tried raising this issue, so it is excellent news that Government is addressing it with commonsense measures.
“For new firms, the inability to access a client account is a barrier to trade and is not conducive to a healthy market.
“For existing firms, when faced with issues regarding their client account, it can prove hugely time consuming and stressful to resolve.”
And she adds: “Without a client account, agents cannot obtain or maintain inclusion under a Government-approved CMP scheme – and without CMP, they will be trading illegally. Its importance cannot be underestimated.”
