Cash levels at Hargreaves Lansdown (HL) swelled a further 23% in the six months to 30 June, up to £13.6bn, as investors fail to reinvest or withdraw their money.
Money left uninvested on the platform could result in the firm earning interest on clients' cash rather than the individuals' themselves. It comes amid concerns from the Financial Conduct Authority (FCA) that, were a platform business to collapse, investors would struggle to recover their money.
The cash levels at the investment platform currently comprise 13% of the firm's total assets under management, according to the H1 2020 results, which also revealed the firm generated £91m in revenue from interest on client cash, up 24%.
Last week, the FCA issued a letter to the chief executive of roughly 600 firms, including HL, stating that it had seen "significant" increases in cash balances over the first six months of the year and said firms must consider whether they need to "hold client money balances which are unlikely to be reinvested" or whether it would be in the clients' "better interests to place these balances directly with their own current or savings account providers".
The regulator added that it expects firms to "return client money balances which are unlikely to be reinvested in the short term" and that it would "continue to review client money balances and follow up with firms that report significantly increased balances".
HL declined to comment.