Influential MP and Treasury select committee chair Andrew Tyrie is calling on advisers to provide evidence of the total cost of regulation in order to better hold the FCA to account.
In an interview with Money Marketing, Tyrie says the profession needs to be more “vigorous” in demonstrating the true cost of FCA supervision.
Tyrie says he wants to see a regular, “robust” figure on the total cost of dealing directly and indirectly with all regulatory demands, not just FCA fees. This would need to include the cost of compliance, fees relating to the Financial Ombudsman Service and Money Advice Service and Financial Services Compensation Scheme levies.
The figure would then be made available to Parliament, regulators and consumers and used as a benchmark against which the FCA could be held to account.
Tyrie says: “The industry has not been as vigorous in substantiating claims that higher costs and other problems are created by regulation.
“It could do much more by monitoring compliance costs carefully. Not just the narrow sense of maintaining a compliance department but the full cost to the business of engaging with the regulator at every level.
“The industry has not done enough. As long as the regulator feels no counter-weight, there will always be the incentive to make that one extra demand.”
He adds: “Regulation is not a free good, the customer always ultimately pays.”
Apfa director general Chris Hannant says: “To make any figure robust we would need quite detailed input from a number of firms but it is an interesting challenge and we will look into it.
“I would not want to create further burdens on members but if we can find a simple way to capture the information then it could be useful.”
Jacksons Wealth Management managing director Pete Matthew says: “It is a reasonable idea because it will give us ammo. Advisers can often whinge about what is happening to them but when it comes to doing something about it there is more reticence. It would be an interesting exercise.”
Earlier this month, FCA chief executive Martin Wheatley rejected calls to compensate advisers after Money Marketing revealed the fee block containing most advisers had been overcharged by £118m over the past five years.