Advisers have welcomed news that the National Audit Office is to investigate whether the FCA and Prudential Regulation Authority provide value for money and are proportionate in their regulation.
The new ‘twin peaks’ regulatory structure, introduced in April by the Financial Services Act 2012, requires an annual NAO review of the regulators.
However, this separate investigation has been requested by the NAO’s comptroller and auditor general. The resulting report is expected in 2014 and is likely to trigger parliamentary hearings by the powerful public accounts committee.
An NAO spokeswoman says: “This study will examine the regulatory framework and approach, providing an early assessment on whether regulation is likely to be delivered in a targeted, proportionate, consistent and transparent way, and whether the bodies are working together effectively.
“It will also consider the impact of the changes, both in terms of the additional costs of the regulators and, where possible, through estimates of the additional costs and benefits to regulated firms and consumers.”
During the legislative process that replaced the FSA with the PRA and the FCA, MPs and peers raised concerns about the potential for increased regulatory costs and double charging.
Lansons regulatory consulting director Richard Hobbs says: “The NAO will take a short ruler to the regulators and they could look very expensive because they tend to pay staff more than average civil servants. That plays right into concerns from IFAs about high regulatory fees.”
Apfa director general Chris Hannant says: “It is about time we saw this kind of scrutiny. It is long overdue. Everyone is worried about fees and the FCA is not as efficient as it could be.”
Clear Financial Advice director Howard Bullock says: “If fees are going to rise, as they have over the past few years, you have to get value for money.”