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IFAs back MPs on FCA cost-benefit analysis benchmarks

IFAs have backed the Treasury select committee’s call for greater scrutiny of regulatory costs to be written into legislation.

In a report on the new regulator, published this week, the TSC says benchmarks for FCA cost-benefit analyses should be laid down in the Financial Services Bill.

It says increasing costs for firms, which are ultimately passed to consumers, have been “neglected” in the past and CBAs should be carried out on some regulations already in place.

The report also says to improve the FCA’s accountability, the committee should be able to demand retrospective reviews of the regulator’s activities, scrutinise its chief executive prior to appointment and the board should be required to publish its minutes.

Committee chair Andrew Tyrie (pictured) says the bill is being rushed and risks creating a “defective” regulatory system.

Bloomsbury Financial Planning certified financial planner Robert Lockie says: “Hasty legislation is often full of flaws and could have to be rewritten.”

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

  1. Julian Stevens 2nd March 2012 at 9:44 am

    The FCA will seek in every way possible to distance itself from the assorted flaws and failures of its predecessor (that was the last lot, nothing to do with us ~ yeah, right). Yet we know that it will be carrying forward several of the FSA’s ongoing programmes, not to mention granting all its employees continuity of employment and pension rights. So it’ll be a case of the FCA keeping the bits it wants whilst shucking off responsibility for those that it doesn’t. How convenient.

    Not that I think there’s much chance of it happening, but if benchmarks for the FCA’s Cost:Benefit Analyses are defined in the latest amendments to the FSMA, in combination with powers to order (not merely request) retrospective reviews of the regulator’s activities, then the first item on the agenda will be a requirement for the FCA to revisit and rejustify the ballooning costs of the FSA’s RDR.

    The FSA’s original cost estimate for its RDR was £600m and it was on this figure that the juggernaut was launched. The latest cost estimate is now more than £2 Bn yet, with impunity, the FSA has merely ignored or brushed aside all calls for it to take a fresh look at the whole thing. It’s attitude appears to be Well, the train’s now out of the station so, no matter how much more it’s going to cost than we first told you, no matter how many extras we decide to bolt onto it, no matter how many embellishments and additional requirements we think up along the way, it’s gonna happen, so get with the programme or ship out.

    That’s not accountable regulation (despite the FSA claiming in a recent letter to my MP that it “takes its accountability obligations extremely seriously”), it’s unbridled tyranny.

    Still, at least Andrew Tyrie seems to have got his teeth into the matter and, so far, he doesn’t seem to be showing any signs of letting go. We can only hope that ultimately he prevails in bringing the regulatory leviathan to heel.

  2. The CBA’s that were meant to inform the RDR consultations were a total sham.

    They used dubious data, concocted spurious assumptions created far-reaching conclusions from this mish-mash and tried to kill an industry.

    Do we want more invention and duplicity?

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