Anyone Used Flagstone
Discussion
Came across these guys when looking for decent deposit rates, and the concept seems to be good https://www.flagstoneim.com/business/
Anyone had any experience with them?
Anyone had any experience with them?
I’d make the same general comments as in this thread:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
It's an interesting concept from a convenience perspective, but bear in mind that Flagstone will take "up to 0.3%" of the gross interest received as a management charge.
Looking at the Personal (rather than Business) product, this is reflected in the net rates being offered. They appear to be lower than if you went the DIY route. The choice of accounts isn't particularly extensive, either.
I guess the question to ask is, does "up to 0.3%" represent good value, or could you keep that for yourself and use a spreadsheet to monitor several separate savings accounts instead?
Looking at the Personal (rather than Business) product, this is reflected in the net rates being offered. They appear to be lower than if you went the DIY route. The choice of accounts isn't particularly extensive, either.
I guess the question to ask is, does "up to 0.3%" represent good value, or could you keep that for yourself and use a spreadsheet to monitor several separate savings accounts instead?
For me (mainly on the business cash side though I do have a personal account too) it's being able to easily view everything in one place and chop and change as interest rates change (or as, say, a 3 month fixed term ends). They also generate a statement at the end of each financial year for tax purpose for the lot rather than having to calculate it separately for each account.
Am paying 0.23%
Am paying 0.23%
Thanks all - very interesting.
Regarding their fees, it seems that they take them from the Banks - not us. Their website says:
[b]How does Flagstone make money?
For each savings account you open through Flagstone, we receive a small share of the interest (up to 0.30%).
We deduct that share before we feature any savings account on our platform – so the rate you see will always be the rate you receive.[/b]
So their advertised rates are net after the commissions. Considering that the advertised rates are higher than what I can get with the individual banks, that seems impressive. I applied for an account yesterday.
Regarding their fees, it seems that they take them from the Banks - not us. Their website says:
[b]How does Flagstone make money?
For each savings account you open through Flagstone, we receive a small share of the interest (up to 0.30%).
We deduct that share before we feature any savings account on our platform – so the rate you see will always be the rate you receive.[/b]
So their advertised rates are net after the commissions. Considering that the advertised rates are higher than what I can get with the individual banks, that seems impressive. I applied for an account yesterday.
So I opened an account. The things I like so far are:
1. Very easy to use.
2. Interest earned is accrued daily and shown on the account.
3. A good mix of instant access, notice and fixed term accounts.
4. The best savings rates for business I could find.
5. Their fees are deducted at source (not paid by me).
6. I've spread the risk over many banks up to the Govt backed £85k threshold, but see everything in 1 account.
1. Very easy to use.
2. Interest earned is accrued daily and shown on the account.
3. A good mix of instant access, notice and fixed term accounts.
4. The best savings rates for business I could find.
5. Their fees are deducted at source (not paid by me).
6. I've spread the risk over many banks up to the Govt backed £85k threshold, but see everything in 1 account.
Currently looking at Flagstone for some business funds and digging into the FSCS protection. Flagstone state:-
"All client funds on the platform are held within a bare trust structure, with Flagstone acting as trustee and you, the client, holding the position of sole beneficiary at all times. This means, you will hold absolute entitlement to your funds on the platform, meaning FSCS protection will apply to you directly and not Flagstone"
The seems legitimate on the face of it but would welcome the opinion of PH'ers much smarter than me
"All client funds on the platform are held within a bare trust structure, with Flagstone acting as trustee and you, the client, holding the position of sole beneficiary at all times. This means, you will hold absolute entitlement to your funds on the platform, meaning FSCS protection will apply to you directly and not Flagstone"
The seems legitimate on the face of it but would welcome the opinion of PH'ers much smarter than me
LooneyTunes said:
The FSCS protection is reliant on the quality of information provided by the deposit aggregator.
Can you expand on this? Are there more details that the bank require for FSCS protection than Company Name, Address etc....LooneyTunes said:
Bear in mind that not all of these firms actually open/manage accounts in your name
Is that covered by the statement in my previous post? They utilise a blind trust in our company name.LooneyTunes said:
then add in the fact that these providers will be attractive targets for fraud/hacking, and it becomes more obvious why top class operations, IT, and security are critical
This is a fair point and something I will consider.LooneyTunes said:
Overall, from the information I could find, I couldn’t make the counterparty risk stack up for me.
Can you define counterparty (I am extremely new to all this)BeastCoast said:
LooneyTunes said:
The FSCS protection is reliant on the quality of information provided by the deposit aggregator.
Can you expand on this? Are there more details that the bank require for FSCS protection than Company Name, Address etc....LooneyTunes said:
Bear in mind that not all of these firms actually open/manage accounts in your name
Is that covered by the statement in my previous post? They utilise a blind trust in our company name.LooneyTunes said:
then add in the fact that these providers will be attractive targets for fraud/hacking, and it becomes more obvious why top class operations, IT, and security are critical
This is a fair point and something I will consider.LooneyTunes said:
Overall, from the information I could find, I couldn’t make the counterparty risk stack up for me.
Can you define counterparty (I am extremely new to all this)The best way to look at it is to roll it all into one theme: data. Everything hinges on data.
Movements of money into/out of your various accounts and details of your allocations within the co-mingled trust accounts (it is most unlikely to be an account solely for your benefit) are all data driven. There will be reconciliation processes but ultimately the various financial institutions and trustees (if they are proper trust accounts) will be reliant on data from the platform. If the platform itself is unreliable or capable of being exploited (externally or internally), to either move or misallocate funds, then you potentially have a problem.
It is my view that the risks associated with things like this are higher in a small/new company that hasn’t had the time, and doesn’t have the money, to mature their systems and processes. Especially if it is capital light and burning money (which they all were last time I looked). Irrespective of intentions, they often don’t have the scale or resources to do everything the way they might with more at their disposal.
From what I’ve seen of the various platform operators, none of them filled me with sufficient confidence to put my own money in. They may have recapitalised and/or evolved since then and, for clarity, I didn’t try to do a deeper dive than what was available on their website and company accounts. That said, if they’re not addressing obvious concerns that you’d expect people above the FSCS thresholds to have then that also sets minor alarm bells ringing.
The other poster also raises an interesting point: the slightly funky nature of where higher returns sit. Personally I’d want to understand how/where returns were coming from rather, especially if tempted (some platforms will allow) if minded to punch through the FSCS thresholds in search of maximising returns.
LooneyTunes said:
BeastCoast said:
LooneyTunes said:
The FSCS protection is reliant on the quality of information provided by the deposit aggregator.
Can you expand on this? Are there more details that the bank require for FSCS protection than Company Name, Address etc....LooneyTunes said:
Bear in mind that not all of these firms actually open/manage accounts in your name
Is that covered by the statement in my previous post? They utilise a blind trust in our company name.LooneyTunes said:
then add in the fact that these providers will be attractive targets for fraud/hacking, and it becomes more obvious why top class operations, IT, and security are critical
This is a fair point and something I will consider.LooneyTunes said:
Overall, from the information I could find, I couldn’t make the counterparty risk stack up for me.
Can you define counterparty (I am extremely new to all this)The best way to look at it is to roll it all into one theme: data. Everything hinges on data.
Movements of money into/out of your various accounts and details of your allocations within the co-mingled trust accounts (it is most unlikely to be an account solely for your benefit) are all data driven. There will be reconciliation processes but ultimately the various financial institutions and trustees (if they are proper trust accounts) will be reliant on data from the platform. If the platform itself is unreliable or capable of being exploited (externally or internally), to either move or misallocate funds, then you potentially have a problem.
It is my view that the risks associated with things like this are higher in a small/new company that hasn’t had the time, and doesn’t have the money, to mature their systems and processes. Especially if it is capital light and burning money (which they all were last time I looked). Irrespective of intentions, they often don’t have the scale or resources to do everything the way they might with more at their disposal.
From what I’ve seen of the various platform operators, none of them filled me with sufficient confidence to put my own money in. They may have recapitalised and/or evolved since then and, for clarity, I didn’t try to do a deeper dive than what was available on their website and company accounts. That said, if they’re not addressing obvious concerns that you’d expect people above the FSCS thresholds to have then that also sets minor alarm bells ringing.
The other poster also raises an interesting point: the slightly funky nature of where higher returns sit. Personally I’d want to understand how/where returns were coming from rather, especially if tempted (some platforms will allow) if minded to punch through the FSCS thresholds in search of maximising returns.
I have a chunk of change with them. It's spread around the various providers up to £85k each. So far the service has been perfect, and they can provide a better interest rate than I can get myself (for example I have an account with Alica that gets me 4.08% but within Flagstone they pay me more without any fees. I checked Co's House today, and their net worth as of 12 months ago was £15m (obvs excluding client funds) so although not substantial by Bank standards, doesn't seem to be Mickey Mouse.
I hope I'm right in being comfortable in being protected by the FSCS (which they claim)!
FSCS will work, if needed, provided their systems are nailed down.
I would keep a close eye though as, although they are profitable, I would expect their cost base to significantly increase following this investment earlier in the year : https://www.flagstoneim.com/press/flagstone-receiv...
There have been some in that market where the cash burn vs liquidity has been quite alarming, with seemingly quite limited runway remaining at times.
Worth being aware of this too if not already: https://www.fca.org.uk/publication/correspondence/...
It's not necessarily a bad market/product, but far from easy to get it right (especially in start-up/scale-up).
I would keep a close eye though as, although they are profitable, I would expect their cost base to significantly increase following this investment earlier in the year : https://www.flagstoneim.com/press/flagstone-receiv...
There have been some in that market where the cash burn vs liquidity has been quite alarming, with seemingly quite limited runway remaining at times.
Worth being aware of this too if not already: https://www.fca.org.uk/publication/correspondence/...
It's not necessarily a bad market/product, but far from easy to get it right (especially in start-up/scale-up).
I was a long term Flagstone customer, but sold all last year, to move into a money market fund (Royal London MM)
It's a lot less hassle / managment, for perhaps a small extra risk and works well for me, appreciate it's not for everyone, but thought it's worth mentioning.
Currently approx 4.93% and for me now 24% CGT on disposal
It's a lot less hassle / managment, for perhaps a small extra risk and works well for me, appreciate it's not for everyone, but thought it's worth mentioning.
Currently approx 4.93% and for me now 24% CGT on disposal
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