FCA urges end to exit fees on investment platforms
The UK’s Financial Conduct Authority (FCA) has set out a package of measures to help consumers who invest through investment platforms find and switch in a better manner.
“We believe it is right that we restrict exit fees, so people can move their money freely”
The package – set out in the final report of its “Investment Platforms Market study” – includes proposed FCA rules and actions.
Christopher Woolard, executive director of strategy and competition at the FCA, comments: “While the market is working well for most of its consumers, the package we’ve announced today should make it less expensive and time-consuming for investors to shop around and move to the platform that best meets their needs. As part of that, we believe it is right that we restrict exit fees, so people can move their money freely.”
The FCA is consulting on new rules to allow consumers to switch platforms and remain in the same fund without having to sell their investments, and is proposing to ban or cap exit fees.
The FCA will review progress made by the industry to improve the switching process later this year, and again in 2020, if needed. The FCA will consider taking forward further regulatory action if the efficiency of the switching process does not improve.
Since publishing its interim report, the FCA has seen firms and the industry acting to improve the provision of information about costs and charges, helping consumers shop around. As a result, the FCA is not proposing new rules but will review the progress of industry in 2020/21, and consider if further action is necessary.
The consultation runs until 14 June 2019. You can give feedback on the FCA website here.
The FCA is a very busy bunny. Just last week, it found that consumer attitudes to cryptoassets show they don’t research their purchases and have a “get rich quick” mentality.
In addition, it confirmed that the Financial Ombudsman Service will soon be able to require financial services firms to pay significantly more compensation to consumers and businesses.
