The Financial Conduct Authority has announced it is abandoning its consultation on investment platform exit fees due to the coronavirus and the direction of travel in the industry.
The regulator had already postponed the consultation to spring 2021 having initially intended to seek industry feedback in Q1 2020. That initial postponement was due to the coronavirus.
But in a press release on Friday afternoon, the FCA said it had now decided to stop work on the consultation.
“Since expressing our concerns in the 2018 Interim Report, there has been a marked shift in the market away from exit fees, with at least two major platforms announcing that they would no longer be charging exit fees,” the press release said. “The FCA welcomes the direction of travel by the investment platforms sector in phasing out the use of exit fees.”
It said the consultation was one of a number of ways it was trying to reduce barriers to switching platforms with other measures coming into effect from February 2021.
The FCA said it would continue to monitor the situation and would launch a new consultation if harm to consumers re-emerged.
The exit fee ban was one of the only issues the regulator sought to address in the final investment platform market study report, published in March 2019, alongside rules to make in-specie transfers simpler.
Interactive Investor announced it would permanently drop exit fees in November 2018, while Hargreaves Lansdown followed suit in September 2019.
See also: FCA urged to extend platform exit fee ban to all investors
