The FCA’s project to help start-ups and established businesses launch innovative ideas will cost almost £1m a year, Money Marketing can reveal.
Project Innovate launched last month and offers qualifying firms help to understand the regulatory framework and how it applies, as well as support for up to a year after authorisation for newly-regulated businesses.
A Freedom of Information request, submitted by Money Marketing, shows the total set-up cost for the project was £182,534, while the expected ongoing costs are £498,146 for every six months.
The request also reveals there are seven staff members in the Project Innovate team, six of whom have been seconded internally and one of whom is a consultant.
A FCA spokesman says the project is in a pilot phase but is intended to be permanent.
The spokesman says: “Project Innovate and the innovation hub are part of our commitment to support innovation by opening doors to those – regulated and not – who come with fresh ideas about how to deliver financial services.
“This work levels the playing field by giving all firms eager to innovate access to our expertise so that the process of joining the financial markets or introducing new products does not seem so daunting.”
In a recent speech, FCA chief executive Martin Wheatley denied the project gives unauthorised firms “special treatment” and is subsidised by regulated businesses.
He said: “The fear is rooted in misconceptions about this work. For a start, regulated firms are in scope. As well as this, the largest firms already have direct access to the regulator through their supervisors.
”What we are doing is going some way to redressing that imbalance. I certainly don’t see that as unfair.”
Penguin Wealth certified financial planner Craig Palfrey says: “Offering support to firms trying to be innovative is a great idea, but ideally this should come from the existing regulatory budget rather than raising more money.”