The investment platforms seem to be unanimous in accepting the need for change. Here are reactions from an assortment o
The investment platforms seem to be unanimous in accepting the need for change. Here are reactions from an assortment of them.
Chris Hill, CEO of Hargreaves Lansdown:
‘Overall the FCA has reviewed the platform market, kicked the tyres and found them in good shape, the market is working well and helping consumers enjoy good outcomes. They recognise the good that the market is doing and how larger platforms can use their scale to negotiate discounts on funds and provide a broad range of services which clients value.’
‘The FCA acknowledges that firms bear costs when clients switch platforms as the majority are still done on a manual, per-line-of-stock basis. We are pleased the FCA’s will look to apply restrictions to exit charges across the wider retail distribution market, as singling out platforms would distort the market in favour of insurance companies and other wealth management services.’
Adrian Lowcock, head of personal investing at Willis Owen:
‘Exit fees have been an ongoing problem for investors, trapping them in services they no longer want or need. Investors are rarely told what the exit penalties are when they join a platform and are clearly put off transferring to a new platform when they find out about them.
‘We have long been a supporter of no exit fees and greater transparency, which is a fundamental principle behind the Willis Owen Platform. However, while this is a positive move in the right direction, a ban is only the first step. More work needs to be done to remove the confusing jargon and different terminology for fees and charges across the industry.’
Alistair Wilson, head of retail platform strategy at Zurich:
‘This is the end of the road for exit fees. The FCA has been flagging its concern for some time and an outright ban is now the most likely outcome. Banning exit fees would remove one of the main barriers restricting consumers from switching platforms. Whether this delivers the necessary impetus for consumers to change remains to be seen but it’s a step in the right direction.’
Nick Blake, head of personal investing, Vanguard Europe:
‘We welcome the FCA’s efforts to improve competition in the investment platforms market. A more competitive investment platform market, that drives down costs and makes it easier to shop around for the best products, will be better for investors and investor returns.
We support the FCA’s decision to look at making transfers more efficient. Our own analysis shows switching between investment providers remains too complex and time consuming. Therefore, we believe that transfer times should be shorter and we advocate a mandatory time limit for organisations to complete each of their steps during the transfer process.
Richard Wilson, chief executive, Interactive Investor:
‘We wholeheartedly agree with an outright ban on exit fees. Capping them doesn’t solve the issues because it’s a recipe for rip offs.
‘Exit fees inhibit freedom of choice and transparency. Other firms are charging excessive exit fees. Nearly all consumers are not aware they will be charged to exit at the point when they sign up.
‘We would be concerned if significant vertically integrated firms were exempted from this, which is completely unfair to consumers.’
Stuart Welch, head of Fidelity Personal Investing:
‘Good news for long-term savers and investors. The FCA has decided against the half-hearted measure of introducing a cap to exit fees and has proposed an outright ban will be more effective.
‘We don’t believe in hidden fees for the consumer and as such, we do not charge exit fees.
‘These fees have always served as a barrier for customers to exit and choosing the best investment platform for their needs and this move will go some way towards creating a more level playing field.’