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PwC Keydata fees total £6.6m

PricewaterhouseCoopers has racked up more than £6.6m in Keydata fees since the firm went into administration last summer.

In its final progress report, published this week, PwC says it is owed £1.94m for the six months ending June 7, 2010.

This time cost comprises 6,002 hours at an average charge out rate of £325. But the firm says it has not yet drawn any of this remuneration.

PwC has drawn fees of £1.74m plus VAT for work spent on the Keydata administration between June and December last year.

The firm accrued fees totalling £4.68m for this period but it says it did not draw the full amount to ensure sufficient funds were available to continue to trade the Keydata Reading office. This time cost comprises of 13,283 hours at an average charge out rate of £352.31.

PwC says it anticipates its remuneration to date will be paid in part from third party funding provided by Credit Suisse and other banks. It says any commission payments due from Lifemark may also be used to settle a portion of the debt.

Trading supervision was by far the main cost in the six months to June 7. This took up 3,617 hours and totalled £1.07m in fees. PwC also clocked up significant hours on strategy and planning, forensic investigations and accounting and treasury.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Michael Fallas 8th July 2010 at 1:17 pm

    How on earth can you justify spending 13,283 hours and at a massive rate of £352.31 per hour staggers me.

    It is a disgrace and just goes further to show how out of control financial regulation is as well as the costs.

    Costs are just totally out of control to reality.

    The FSA, FSCS and FOS cost us all some £3 Billion since 2005/5 yet the amount paid out by the FOS during the same time was £2 Billion and a high proportion of that was due to the banking crisis.

    The cost of regulation now far exceed the benefit and each year and day the costs increase even more.

    How much longer this madness can go on one can only wonder. I suppose as long as those who stay in this industry can afford to pay.

    The system will break eventually if nothing changes.

    When

  2. Do they have to use the most expensive consultants on the planet?

    Do they have to write a suitability style report detailing every charge and cost? If not why not? this is what the fsa expects from us.

  3. Our Keydata information is that PWC has billed nearer to £13 million and more like £800 a day. Can only assume that clerical staff is less.
    Guess you don’t get much for your money these days. Disgraceful!

  4. I’m not sure PwC’s role has been fully understood in this – it has nothing to do with regulation and FSA. They are administrators appointed under Insolvency Law to oversee the winding-up of the business.

    The fees associated with that work are what they are – it is a specialist, high-risk area which few firms are capable of doing. That’s why the fees are so high.

    Anger at the FSA should be for allowing the business to trade in the first place and clients to invest, and lose, their monies.

  5. Slav Paleolog 8th July 2010 at 4:20 pm

    Mister Maker is not wholly right, I feel. I don’t accept it’s ‘high risk’. Administrators work under ‘limited legal liability’ which basically means that it’s very, very difficult to make a successful complaint against them resulting in a). an apology or even b). financial compensation so no matter how incompetent they are, you can’t, for example take them to the Financial Ombudsman Service as the FOS has no jurisdiction here.

    I agree that it is specialist work for which competence is required. High fees ? Well, OK, but NOT obscene ones, which these ARE.

    I have actually confronted the PWC just recently for the way it handled (or rather, failed to handle,) maturity monies for a Keydata administered plan – which was sold on to another Structured Products provider.

    Because, collectively, this new provider, PWC, Keydata and the body holding the maturity monies – in Guernsey, I believe – all fell asleep on the job, final maturity payments were 4 weeks late. In spite of the fact that the maturity date was set in stone years in advance.

    I was told that the money flowed from Guernsey to London back to Guernsey again … I think you get the idea. A major cock-up.

    I know beacuse I was a policyholder and I was losing money hand-over-fist each day I didn’t have it.

    Nobody’s bothered to apologise … Apparently I can make a complaint via The Insolvency Service but I’m not sure it’s indepedent and I don’t hold out much hope of even a reply.

    I am very pleased that Vince Cable has asked the OFT to examine the ‘cartel’ of the Big 4.

    Incidentally, I wholeheartedly agree with Michael Fallas’ comments given above.

  6. Yes, Mister Maker, PwC were appointed as administrators after they had been asked by the FSA to review Keydata’s solvency. When PwC concluded that Keydata was insolvent they did so on the basis that there would be no more commisisons from third parties such as Lifemark. But once Keydata was put into administration and PwC took on the role of administrator, they demanded those same commisisons from Lifemark.

    Go figure.

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