In an effort to enhance competition in the retail investment market, regulators in the U.K. are proposing new rules designed to make it easier for consumers to switch firms, which include curbing exit fees.
In a consultation paper published Thursday, the U.K.’s Financial Conduct Authority (FCA) set out a package of proposed reforms that aim to improve competition among investment platforms by making it simpler, and cheaper, for consumers to move between providers.
In particular, the regulator has proposed rules that would enable investors to transfer between firms without having to liquidate their investments. It’s also consulting on measures to either cap or ban fees that firms charge when consumers transfer to a new provider.
“Our proposals seek to improve consumers’ ability to switch between platforms and enable them to benefit from lower costs and/or better functionality that suits their needs. In turn, we expect this to improve competition in the sector, including lower prices, increased efficiency and an improvement in the consumer experience,” the FCA said in the paper.
“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,” said Christopher Woolard, executive director of strategy and competition at the FCA, in a statement.
“As part of that, we believe it is right that we restrict exit fees, so people can move their money freely,” he added.
Overall, the FCA said that “this will help us to deliver public value through a better functioning retail distribution sector.”
The consultation on the FCA’s proposals runs until June 14. After that, the regulator may have another consultation on final rules for exit fees.