Claro App

Ericthepenguin

Hi Chaps

I cannot see that anyone has posted about this, hence my post.

If you go to Claromoney, (sorry cannot post a link as i am a newbie).

The app pays 2% on £3000 and it appears to be covered by the FSCS. Not sure what the 'rub' is here. Maybe they have commission from recommending certain investment vehicles? Your thoughts?

Regards

Eric

DireEmblem

I would check they are regulated by the FCA which they should be.

They also offer much simpler/better terms than Chip.  Will do some digging as the 2% is appealing tbh.

DireEmblem

You will get charged a subscription fee after a year.  Thought there would be a catch somewhere.

Daliah

Their claim that they are FSCS protected is not supported by the FSCS website, which says "not protected" for the companies involved in that Claro deal (Claro Wealth and Wealthkernel Ltd, as well as other companies they seem to be associated with).


There's no entry on FSCS for Claro Money, or any other 'Claro' that would be related.


The Claro app claims FSCS protection to £85K via their "custodian, Wealthkernel Ltd".

DireEmblem

@Daliah

>Cash pots are covered by the FSCS, and saved in a NatWest account

The cash is held in a NatWest account, its the NatWest account that provides the protection.  Much like when Chip and Plum launched, they used the protection of another provider.  For Chip I think it was Barclays, so if Chip went bust, your funds were held in Barclays.

Daliah

DireEmblem said:

@Daliah

>Cash pots are covered by the FSCS, and saved in a NatWest account

The cash is held in a NatWest account, its the NatWest account that provides the protection.  Much like when Chip and Plum launched, they used the protection of another provider.  For Chip I think it was Barclays, so if Chip went bust, your funds were held in Barclays.

Whilst it is correct that Claro say that the money is held in  a Natwest account (a single one for all Claro customers if I understand correctly), they certainly do not claim anywhere that it is Natwest who provide the FSCS protection.

If it was the case, which I don’t believe for a minute, that Natwest provides the FSCS protection, why would Claro not say so, and why wouldn’t they warn people that if they had other deposits with Natwest, their total protection is for £85k only?  

It’s all quite murky.

Here are a couple of screenshots from the Claro app:

Daliah

Here you  go. Money held in a pooled account. So how would Natwest even know what money belongs to whom?

Lots and lots of those eMoney providers lull their customers into a false sense of security by mentioning that the money is held in a bank.

Claro’s protection claims are totally intransparent, and I won’t be risking a single penny with them myself. There are easier, risk-free, ways to get 2% on £3K.

Daliah

To muddy the waters further, the FCA register lists

WealthKernel Limited, Reference number: 918171

The Financial Services Compensation Scheme will not be able to consider a claim against this firm if it fails

as well as

Wealthkernel Limited, Reference number: 723719, also trading as WealthSmart

The Financial Services Compensation Scheme may be able to consider a claim against this firm if it fails

918171 is not protected according to the FSCS website, 723719 is not found there

As per screenshot above, the Claro website states that they act as an Appointed Representative (AR)* of WealthKernel Ltd (the one with the upper case K) and claim this is registered with FRN 723719. Going by the FCA register, Claro is an AR of 723719 (the lower case k one, which isn't listed on the FSCS website).

For Claro itself, the FCA Website has Claro Wealth Limited, FRN 945930, and says the Financial Services Compensation Scheme may be able to consider a claim against this firm if it fails. However, the FSCS website clearly lists them as not protected.

How any consumer is meant to make sense of this jungle of conflicting information is anyone's guess. 

*According to the FCA website, an AR is a firm or person who carries out a regulated activity on behalf, and under the responsibility of, a firm authorised by the FCA (the principal). In appointing an AR, the principal assumes responsibility for the regulated activities the AR carries out. 

Emmia

I think when someone of reasonable intelligence and knowledge can't easily discover whether someone using Claro is protected or not, and how that protection might work then, it should be a thank you, but no thank you.

Also, patronising jargon. (On a now deleted post)

"I can understand why it might be hard to understand how the fintech ecosystem works when you are not a financial professional service worker."