Categories: Industry
Tags:FSA| FSA RDR| chris cummings
The FSA’s “shaky” cost-benefit analysis of the RDR will face “proper scrutiny” after the National Audit Office (NAO) announced it is to investigate the FSA, the Association of IFAs (AIFA) says.
AIFA director general Chris Cummings says questions about the regulator's budget "have tended to be the last ones asked" but claims it will now be held accountable for its actions.
The FSA's total budget now stands at over £400m per year, but the regulator estimates the RDR's implementation will include one-off costs of £2m and ongoing costs of £1.2m.
Furthermore, an independent Professional Standards Board (IPSB) set up to oversee, among other proposals, the RDR's new minimum qualification requirements and to come up with a new code of ethics has been estimated to cost about £35m a year to run.
Earlier this week, Sarah McCarthy-Fry, Exchequer Secretary to the Treasury, announced the NAO would perform a full audit of the regulator, its first for more than two years.
It would enable the Public Accounts Committee, she said, to "receive and investigate reports into aspects of the economy, efficiency and effectiveness of the FSA's performance".
Cummings says: "The regulator's RDR cost-benefit analysis sounded shaky but now we will find out exactly what it has spent its money - correction, our money - on.
"At last all those challenges the FSA receives about its pensions bill and the amount it spends on champagne at the Christmas party will be answered. This is a really positive move."
Cummings says he is pleased the audit would not be a "one-off" as the NAO has been selected statutory auditors of the FSA.
The FSA was last audited in 2007. That report recognised the progress the regulator had made since it was set up in 2002, but it was criticised for failing to do more to demonstrate its impact and for a lack of transparency over the cost of its day-to-day activities.
| Comment | NAO to scrutinise 'shaky' RDR cost-benefit analysis |
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quango quango quango quango
How much is a can of whitewash?
Posted by: anonymous
FSa quango audit
Happily I think we can trust Chris Cummings to keep a close eye on things and to complain at any lack of sincerity in the audit.
Posted by: Orlando Furioso
Bonuses and Christmas Parties
Last year the FSA allegedly spent c £200,000 on Christmas Parties for themselves and c £22 millions on bonuses when they had a substantial black hole in their finances. I wonder if they possess the chutzpah to repeat such profligacy this year?
Posted by: David Chubb
Truth
Scrap the FSA, and the RDR. Investors, the economy and the financial services sectors will all benefit.
Posted by: The Last Honest Man
To the last honest man
Im wondering where you have been over the last few years. First how does scrapping the FSA, help the investors, economy & the financial services. So how did this crunch start and what was the fallout? Agree with other comments, how can the FSA be allowed to get away with such bonus payouts. Surely if they were a financial institution themselves, are they adequately capitalised? Or will the government or Bank of England bail them out, the too big to fail syndrome. How are they incentivised, are the staff bonus chasers? Does everyone in the economy need to be paid a bonus for the work they should be doing. Maybe i should pay my wife a bonus to take the kids to school. Another bonus to pick them up at the end of the day. On the flip side RDR is good (from the minimum qualifications point of view), increase the level of professionals and drive a few more cowboys out of the industry. In addition, hopefull lower PI costs and FSA fees.
Posted by: PRO RDR
To PRO RDR
I strongly object to your comments that anyone who hasn't attained Level 4 is a cowboy. There are many advisers aged 50+ who haven't sat exams for decades and would find it extremely arduous to attain them now. Experience is often much more valuable than a pure qualification. I obtained my Chartered Accountancy qualifications in my early twenties but it was the experience I gained since that improved the quality of advice my clients received. It should be of great concern to all that the valuable experience of countless advisers may be lost.
Posted by: Experienced IFA
Anonymous Strikes Again
This is aimed specifically at Pro RDR and those who choose to make disparaging remarks about strangers from behind the screen of anoniminity. You have this right, of course, but it doesn't impress those who were brought up to put up or shut up in an open fashion. You could be an FSA stooge for all I know by remaining a secret sniper, thus reducing the credibility of your arguament.
Posted by: David Chubb
Pro RDR
First, to Experienced IFA. Thanks for your comments, even though a little amusing. Where have i, in my comment have i mentioned that anyone who does not have a leve4 is a cowboy? I have read my comment and have not come across that statement. In addition, the next is to David Chubb. I have read through your rant and rave, and all it seems to be is a rant and rave. The question for you, who have i specifically made disparaging marks about and what are these remarks? you seem to contradict yourself, looks like those disparaging remarks seem to come from you to me. In addition, you mention that given my message was from anonymous, you feel that i maybe an FSA Stooge. How did you come to that conclusion? ( or shall i say disparaging remark. This thread has one other anonymous message, Is he an FSA Stooge? I noticed another message from Experianced IFA. I would doubt that is his name given on his birth certificate. I would say that message was from an anonymous source too, given that his/her name is not mentiond. Is this person a stooge too? Same applies to a message from to the last honest man. Is this person a stooge too? Look forward to replies from both yourselves.
Posted by: To experienced IFA & David Chubb
Snow Job
The NAO audit is a snow job. The FSA is coming for an increasing level of criticism on a wide range of activities - so how better to demonstrate they are doing a good job. Has anyone out there any idea how to "value" the work the FSA do? Is the country better off with them than without them? Its actually impossible to know, just as it is impossible to know whether they made one ha'penny worth of difference either way to the Credit Crunch. But to have an Independent Body, the National Audit Office, paid by the Government say they give decent value for money provides a veneer of respectability again. Oh, there will be the odd small criticism to prove that the NAO have done some work (that's a standard Civil Service technique) but the end product is a Snow Job. And I'll bet William Hill wouldn't even give odds of the result. But it all gets Britain's version of the Stasi out of the hot pan.
Posted by: Glen McKeown
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ANY REVIEW IS BETTER THAN NO REVIEW
My main concern is the last NAO review in 2006 which gave the FSA a clean bill of health. Having said that any review is better than no review.
Posted by: Simon Mansell