Rob Yuille, head of Long-Term Savings Policy at the ABI which has many platform members, said it was important to remember that the FCA had recognised that the platform market was working well for most consumers.

He said: “In this rapidly growing market, innovation is further stimulating greater choice and providing value for consumers and advisers. We are pleased that the FCA has welcomed progress being made across the industry to improve the switching process through the STAR initiative, which the ABI played a key role in facilitating.”

Andy Bell, chief executive and founder of platform AJ Bell, welcomed the ban and said any restriction on exit fees should not have a material impact on AJ Bell.

He said: “Investment platforms play a vital function in helping people manage their long term savings and the regulator is absolutely right to question whether consumers are receiving the best possible service and value for money.  Identifying areas where customer outcomes can be improved is vital for the development and growth of an increasingly important market and today’s report is a significant step in the right direction.”

He added that switching between platforms is “definitely” an area AJ Bell would like to see improved but should be industry wide and include non-platform products to create a level playing field.

He added: “It is also good to see the FCA address the issue of multiple share classes of the same fund which arguably presents a bigger barrier to platform switches.”

Chris Hill, chief executive of platform and wealth manager Hargreaves Lansdown said it was good that the FCA would look to apply restrictions to exit charges across the wider market.

He said: “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 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.”

Jackie Boylan, head of Fidelity FundsNetwork, said the proposed changes were “good news” for investors.

She said: “There’s no mediocre measures from the FCA today, with a proposed ban on exit fees, rather than a cap. We do not charge exit fees so we welcome the FCA’s focus on ensuring that consumers are charged reasonably without penalties for transferring their assets.

“We are very supportive of the FCA’s attention on ease of switching between platforms and believe that overall this happens relatively seamlessly between platforms, but we do need to apply focus on all firms offering retail distribution services, not just platforms.”

Steven Cameron, pensions director at Aegon which has its own platform, said the newly-formed STAR initiative should deliver both short and longer term improvements in process efficiency and completion times.

He added: “Thankfully, the FCA has dropped the most controversial proposal which would have required platforms to ‘police’ the ongoing provision of advice where a customer was paying ongoing Adviser Charges and there had been no platform activity for 12 months.”

Anthony Morrow, CEO of evestor, said he was pleased that the FCA was looking to make transfers simpler but said the problem was not just related to unit class conversion.

He said: “The whole process still takes too long in many cases, with some providers seeming to drag their heels before customers can transfer out. On average, advised transfers to evestor take around 8 - 12 weeks from start to finish, but they can be much longer than this – one we dealt with took 11 months!”

Caroline Mansley, managing director of Criterion which joined with TeX to form STAR as a joint initiative, said: “We welcome the regulator’s recognition in this Final Report of the action being taken by STAR on behalf of the industry to improve switching and transfer times, as well as customer communications, in the investments and pensions sector. However, there is a lot of work ahead of the industry to meet the expectations of the FCA.”