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Tories slam ‘epic’ cost as FSA doubles its estimates

Conservative regulation tsar John Redwood has attacked the FSA’s “epic” costs to implement the payment menu.

The FSA has admitted it underestimated the industry spend on depolarisation by 20.5m in its first consultation paper. It initially said the cost of the menu in terms of adding to the sales process would be 14m for tied firms and 6.5m for independent firms, with the explanation taking three minutes. It has now doubled these estimates to 28m for tied and 13m for independent firms, after doubling the time to explain the menu from three to six minutes.

Redwood was appointed Shadow minister for deregulation in September and has concentrated efforts on attacking requirements from Brussels but says attention is now being focused on the FSA.

The Tories are working on a review into how financial services regulation could be slimmed down and will soon announce plans for streamlining the sector.

Redwood says: “We think the FSA should do a much better job in terms of cutting cost of regulation for investment businesses. These epic regulation costs do nothing but tax the consumer. They started off with polarisation, which many IFAs thought was deeply damaging for their businesses, and now we have an even more complicated system in place. These costs will certainly be passed back to the consumer.”

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