In its response to the FSA’s consultation on the Financial Services Compensation Scheme’s management expenses levy limit for 2013/14, the Association of Professional Financial Advisers (APFA) has questioned the rising cost of regulation.
Clare Griffiths, senior policy adviser at APFA, said: “We struggle to see how the FSCS can justify budgeting for an increase of nearly 13% in its management expenses in 2013/14, when it expects claims decisions to fall by nearly 40% at the same time.
“We are also concerned about the disproportionate amounts being spent on the change programme and ‘exceptional’ costs. More than half of next year’s budget is allocated to these expense items.
“The FSA needs to hold FSCS to account on this. The costs of regulation increase each year, and more needs to be done to challenge regulatory bodies like FSCS about their expenditure levels. The FSA needs to be rigorous in its analysis of the FSCS budget.”