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View the article online at http://citywire.co.uk/wealth-manager/article/a761221

FCA falls into £2.9m deficit & spends £3.3m on RDR

by Dylan Lobo on Jul 10, 2014 at 12:55

FCA falls into £2.9m deficit & spends £3.3m on RDR

The Financial Conduct Authority (FCA) made a loss of £29.3 million over the year with the money it spent on the retail distribution review rising.

According to its annual report for the year to 31 March 2014, the financial watchdog had a deficit of £2.9 million at the end of the year versus a surplus of £22.8 million in the previous year.

The loss was partly due a decline in fee income, which fell from £449 million to £435.4 million. This reduction was driven mainly by the FCA returning an extra £8.9 million to fee payers.

It also registered an actuarial loss of £26.4 million in relation to its defined benefit scheme, although this was narrower than the £43.9 million loss in 2013 due to 'actual experience against the assumptions being closer than the prior year'.

Meanwhile 'Other' income increased from £16.7 million in 2013 to £35.4 million in 2014.  

Elsewhere operating costs fell from £528.2 million to £434.5 million, thanks in part to a decline in regulatory reform costs from £31.6 million to £2.6 million.

However, RDR costs rose from £2.4 million to £3.3 million.  

1 comment so far. Why not have your say?

CoeurDeLion87

Jul 10, 2014 at 16:09

It's amazing to consider that any regulator should be allowed to project new doctrines, rules & regulations to all & sundry in the UK financial services industry, force banks and financial institutions to adopt new capital ratios and yet run a deficit itself. The recent avalanche of fines adopted by FCA SEC & others can only cause greater resentment between regulators, firms and individuals. Regulation is costing the City and the UK economy generally billions and yet so far very few seem to consider the consequences or accountability. The inevitable financial calamity developing (debt) for US UK & EU wont be aided by all this either. There's an old phrase which many need reminding ..."one cannot close the door after the horse has bolted" and yet the entire regulatory framework ironically is supportive of failure and market consolidation. Spending £3.3m on RDR sums up part of the problem here but I'm 100% sure that nobody has calculated its real damage to the City's reputation, its outrageous treatment of experienced personnel, its shameful attitude to fees over commission, its demolition of private broking and financing, its clear and concise affront to privacy, its intolerance to anyone who is prepared to stand up for investors, its inability to handle basic issues and take full unlimited responsibility for its gross failures and its dictatorail approach to well tried and tested examples of market trading, etc.

Just this week Bloomberg TV asked the Q. "Where does all this money (referring to the level and number of current fines pending) go to?"

It's clear that ivory towers are being constructed at great speed, new apparatchik behaviour is being conducted and that an investment banking bonus pool culture is now part & parcel of the UK & US regulatory world that in reality protects very limited numbers of investors of all shapes & sizes.

These numbers may be inconsequential now but it can only get worse unless politicians wake up to the wretched smell that is coming from Canary Wharf.

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How is regulation feeding the outsourcing trend?

on Jul 24, 2014 at 10:59

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