Tenet is calling on the Government to conduct a new cost- benefit review of the FSA’s 2012/13 budget, describing the 16 per cent rise as “uncontrolled regulatory costs”.
In March, the FSA confirmed that its budget is increasing by 16 per cent from £500.5m in 2011/12 to £578.4m in 2012/13. This followed a 10 per cent increase from £454.7m in 2010/11.
The FSA also confirmed the Money Advice Service’s budget for 2012/13 doubled to £86.8m, up from £43.7m in 2011/12. The FSA said this reflects the Government’s decision to move debt advice to the MAS.
In 2010/11, the FSA became subject to National Audit Office audits but Tenet distribution and development director Keith Richards says the regulator’s spiraling costs justify further Government scrutiny.
Richards (pictured) says: “At a time when the Government is preaching austerity and implementing major spending cuts, the FSA seems entirely exempt.
While the industry has to foot the bill, it is the consumer who ultimately pays as these uncontrolled regulatory costs will, of course, be passed on and affect the accessibility of advice.”
In February, the Government announced that from 2013 the Financial Conduct Authority’s budget will be scrutinised by the National Audit Office.
Both the FCA and the Prudential Regulation Authority will also be accountable to the public accounts committee, which assesses accounts based on value-for-money criteria.
PMI Independent Financial Advisers director John Stewart says: “Pretty much every adviser in the industry would support a review of the FSA’s costs. It is about time the regulator is held fully accountable for its soaring budget and proper scrutiny of its costs is applied.”