Solicitor's interest rate on clients AC

[Deleted User]

My solicitor advised me (naturally when I asked) that the interest rate that he pays on the depostit for my house sale is 3.25%. IMO. this is very low when there are accounts on the market paying much higher rates. I think this is very irresponsible handling of clients money. I thought solicitors should pay at least the BOE base rate. Do I have any rights to complain, and if so to whom. The Law society perhaps, I really don't know what my rights are. If I did know any better, I would say that he is investing the money at say 6% and pocketing the difference. It's a large sum involved over a period of some 2 months between exchange and completion because I agreed with the buyer to wait till Feb due to her renatl agreement till then.

lynnexxxo

Why not ask you solicitor for the money and put it is a higher interest account yourself ?

dmg24

I think this is very irresponsible handling of clients money.

I am not sure why you would say that this is irresponsible?

Your money has been placed in an account, the solicitor is not using it for another purpose in the meantime.

Remember the account needs to be an instant access one, most of the higher interest accounts will only allow a limited number of withdrawals, and will ask for a period of notice prior to withdrawal.

[Deleted User]

dmg24 wrote: »

I am not sure why you would say that this is irresponsible?

Your money has been placed in an account, the solicitor is not using it for another purpose in the meantime.

Remember the account needs to be an instant access one, most of the higher interest accounts will only allow a limited number of withdrawals, and will ask for a period of notice prior to withdrawal.

It is irresponsible because he is not investing the money in an effective account. I do accept that the account needs to be instant access, but I still maintain that there are many accounts on the market offering higher interest rates without any conditions.

Secret_Wookie_2

Commercial savings accounts pay considerably less than personal ones. 3% is fairly good for a business savings account.

dmg24

Why not suggest a different account to him then? Remember that this would have to be a specific type of business account, not a personal one.

Irresponsible is a strong word to use, and considering that many accounts pay considerably less interest than 3.25%, I do not think that you could accuse your solicitor of misconduct as such (which is what you would be doing if you reported him to the Law Society).

Your solicitor is not a Financial Advisor, if he was, I would advise differently.

I really do not see a problem here, and I am certain that the Law Society would not entertain such a complaint.

silvercar

Under Law Society rules, the solicitor is obliged to account to you for the interest. If your deposit meets the criteria (which is based on length of time and amount of deposit, minimum £20), he gives you the interest. So you will get all the interest he receives. For the amounts held for clients below the time/ size stipulated by the LS, or below £20, he gets to keep the interest. It is therefore in his interest and yours to get the best interest he can.

He obviously has a business to run, so you can't expect him to change accounts at the drop of a hat, but will usually maintain a client savings account with his main bank, this also means he can transfer funds in one CHAPS transfer rather than two, when it comes time to complete on deals, saving you a second charge.

If I did know any better, I would say that he is investing the money at say 6% and pocketing the difference.

He really is not allowed to play around with clients money.

Bean_Counter

In a previous life I used to do a lot of solicitors accounts' audits and I am not aware of any prescribed interest rates in the Law Society rules, only the requirement that under certain circumstances money should be placed in an interest bearing account.

I agree with other posters that the interest rate might not be great, but it is 'reasonable' and I do not think that you would have a case with the Law Society.

Best bet would be to speak to the solicitor involved and ask them if they would reinvest the funds.

Richard_Webster

I agree that the rate is about right and with the explanations given by inter alia dmg24.

[Deleted User]

Thank you all for your very kind replies. They were all very constructive; perhaps I overlooked the fact that rates on business accounts are somewhat lower than personal ones. I feel more confident now that I shared my concern with you all - that's what I love about this forum. Thank you all once again.

Debt_Free_Chick

Even charities, clubs (not for profit) and village hall committees can't get the savings rates offered to private savers.

As someone who runs two charities (on behalf of the Parish Council) we would be glad to get 3.25%.

I understand your concern, but agree that the rate they're getting is actually pretty good for a business or "community" account (i.e. one offered to not-for-profit organisations).