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FSA stands by its £225m cost estimate

The professionalism requirements will cost advisers up to £225m by the end of 2012 and up to £12m in ongoing annual costs from 2013.

In its final rules on professionalism, published last week, the FSA stood by the figures in its cost-benefit analysis, first published in the consultation paper on professionalism in June.

This is despite responses from advisers arguing that the regulator has underestimated the cost to the industry of the rules.

In CP10/14, the FSA said costs to the regulator would be in the range of £4m to £5m initially and £3.5m annually. It estimated the total costs to advisers would be between £155m and £225m to meet the standards required by the end of 2012 and £3m to £4m annually after that.

The FSA says advisers will also incur the costs of independent verification of their compliance with professional standards.

The final rules state: “As this market does not yet exist, we estimated costs to advisers at between £3m to £8m each year, based on information from potential accredited bodies. This was likely to be an overestimate, as most advisers already belong to professional bodies and therefore may not incur additional costs.”

The FSA believes statements of professional standing, which independent and restricted advisers will be required to hold from 2013, can be delivered for between £60 to £175 per adviser.

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  1. Just keep piling on the red tape, never mind the costs. For over a decade, the industry has been pleading for a slow down to the FSA’s never-ending stream of new initiatives, for stability, for a chance to adapt to all these new procedures, for some meaningful and sympathetic dialogue between the regulator and the regulated, for a bit of breathing space.

    But, as usual, the FSA takes no notice whatsoever and just ploughs on regardless of what anyone else may think or say. In fact, the more the industry asks for some respite, the harder the FSA presses down on the accelerator pedal of its mighty juggernaut which is now careering more wildly than ever out of control, completely unbridled by any sort of accountability or adherence to anything approaching reasonable standards such as the Statutory Code of Practice for Regulators. The FSA has its own agenda and anyone who disagrees………………. The lunatics really have taken over the asylum.

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