Investment platforms provide an important service as they arrange, safeguard and administer investments on behalf of consumers.

The UK’s Financial Conduct Authority (FCA) has published the final report of its Investment platforms market study. The FCA found that the market is generally working well: consumers are able to make informed decisions and platforms are competing in the interests of most consumers. But many consumers might find it difficult to switch between platforms because they typically charge exit fees.

Exit fees do not feature in most financial product markets as they can often act as a barrier to switching, which regulators and competition authorities typically seek to minimise as part of efforts to ensure competition works effectively. More recently, focus in the UK has turned to possible interventions directly on fairness grounds. The FCA published a new framework for assessing fairness in financial services last year, which suggested that pricing practices that make it more difficult for customers to switch might be seen as unfair. How the FCA approaches exit fees in the investment platforms market will therefore provide an early view on how it will apply the new fairness framework in practice.