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The FCA publishes its Annual Report

July 27, 2016

Last week the independent regulatory body known as The Financial Conduct Authority (FCA) published its annual report for 2015/2016.  The FCA is funded entirely by the financial services firms it regulates.

 

As a matter of course, the financial services sector scrutinised the 129 page report. The  top priority was not only to analyse how wisely their significant financial contributions to the regulator had been spent, but also to get a better understanding of how effectively the FCA had delivered on projects specifically implemented to improve financial services outcomes for the consumer.

 

The report revealed that throughout the year the regulator gathered some £522.4m in fees, spent £330.7m on staff costs and £221.5m in administrative costs. This purportedly evidences positive financial results with a surplus of £21.3m compared to the previous year where the FCA had made a loss of £69.8m. This positive balance sheet has been attributed to gathering a significant increase in fees due to an increase in number of firms the FCA regulates.

 

Staff and administrative costs were revealed to be by far the greatest expense totalling £552.2m and making up well over half of total expenditure.  Topping the bill was the FCA’s former CEO, Martin Wheatley, who paid himself a colossal £827,000 for his final year working for the regulator.

 

There is a wide understanding that “you have to speculate to accumulate” if you expect to get anywhere in business and the FCA is no different. Every business needs an investment of both time and money. If you don’t give your business the time and resources it needs it will not grow nor perhaps even survive. With this in mind the FCA certainly hasn’t been shy in its spending, but how effective has it been in terms of achieving its goals?

 

The FCA’s strategic objective is to ensure that the relevant markets function well and its operational objectives are to:

  • Protect consumers – secure an appropriate degree of protection for consumers.

  • Protect financial markets – protect and enhance the integrity of the UK financial system.

  • Promote competition – promote effective competition in the interests of consumers.

 

John Griffith-Jones, chairman of the FCA, said of the report: “A simple quantitative assessment of our achievements during the year is not possible, but there are some indicators of a positive direction of travel.”

 

Undoubtedly, the majority of financial services firms footing the FCA bill would liked to have seen one.

 

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Bradbury Hamilton Limited is authorised and regulated by the Financial Conduct Authority
© Bradbury Hamilton 2015. All Rights reserved

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A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 023 4 567