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Advisers rap FSA on staff bonuses

Advisers have slammed the FSA for paying staff nearly £20m in bonuses, branding it “inappropriate” and “insensitive”.

The figures, obtained by the Liberal Democrats through a Freedom of Information request, show the FSA paid £19.7m in bonuses last year, a 40 per cent increase on the previous year.

It was also revealed that £4m went to executives earning over £100,000 and that one emp-loyee received a £90,000 bonus.

The average bonus paid to regulator executives was £19,100 while the average for other staff was £4,107. In February, Money Marketing repor-ted the FSA had set aside £10m in its 2009/10 budget to increase staff pay, as well as 15 per cent of total staff salaries, £21m, for potential bonuses.

Tenet group distribution and development director Keith Richards says he has received many calls from members angry at the amount that has been paid and the timing of the bonuses.

He says: “The bonuses are inappropriate and completely insensitive, given the current market challenges.

“The IFA community has been angered, particularly given the regulator’s failures that have contributed to the crisis.”

The Mortgage Practitioner principal Danny Lovey also branded the bonuses “inappropriate”. He says: “Brokers are on their knees at the moment trying to survive and we are paying bonuses to people in ivory towers through our fees.”

Financial Choices partner Richard O’Fee adds: “It is ironic that the FSA is paying bonuses while opposing the practice in the City.

“If it is bad for the private sector why is it okay in the pub- lic sector?”

An FSA spokesman says: “The FSA needs to attract and retain high-quality staff to deliver better regulation. Any such structure must have a variable element so that we can recognise individual performance appropriately.”


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 4th June 2009 at 11:03 am

    Advisers rap FSA on staff bonuses
    An FSA spokesman trots out their tired old maxim: “The FSA needs to attract and retain high-quality staff to deliver better regulation.”

    Which rather chronically overlooks the fact that to date this strategy hasn’t worked ~ has it?

    And why does the FSA need to house all its highly paid staff in one of the most expensive areas of business real estate in the entire UK? Never mind the budget ~ whatever we think we need, we’ll just add to the next round of levies.

  2. Profit Sharing
    I worked in banking over 20 years ago. Then staff looked forward to finding out what profit sharing they would get each year. It however always depended then on the bank actually MAKING a profit.
    Surely the easiest way of establishing bonuses for the FSA would not only require them to achieve and EXCEED set personal goals viewed as being above and beyond what their salary is for, but that they are paid based on how well the industry they supposedly regulate is doing. Lastly if they were paid in arrears (say 3 years) at least it would mean they wouldn’;t get their hands on a penny until it was clear what they had done was not just short termisim.

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