FSA staff exodus gathers pace

The FSA has seen a 30% surge in the number of staff leaving ahead of the new twin peaks regulatory model, with 430 permanent employees quitting last year.

A freedom of information request, submitted by Money Marketing, Mortgage Strategy’s sister publication, shows the number of staff leaving the FSA rose from 330 in 2010 to 430 in 2011, a turnover rate of around 11%.

The number of staff leaving has more than tripled since 2009 when 129 left the regulator.

Of the 430 staff who left during 2011, 47 earned over £100,000. In 2010, 31 FSA staff on salaries over £100,000 left, compared to nine in 2009. So far this year, 105 permanent employees have left, with 22 paid in excess of £100,000.

As at the end of March 2012, the FSA employed 3,885 full-time equivalent staff, compared with 3,909 in March 2011. Of those, 320 permanent FSA staff earn a salary of between £100,000 and £199,999, excluding benefits or bonuses.

Thirteen FSA staff earn bet-ween £200,000 and £299,999 and “fewer than 10” earn in excess of £300,000.

The FSA did not provide comparative figures for 2011 but in May the number of staff earning over £100,000, including non-permanent staff, was around 389. This figure includes any bonuses paid.

As part of the FSA’s recent business plan for 2012/13, chief executive Hector Sants warned the resources required to deliver the new regulatory landscape, which will see the FSA split into the Financial Conduct Authority and the Prudential Regulation Authority early next year, will significantly increase costs. The FSA budget for 2012/13 has risen by 15 per cent from £500.5m in 2011/12 to £578.4m.

Sants announced last month he is leaving the regulator at the end of June. He will continue to receive his annual £500,000 salary plus benefits until the end of December.

Former conduct business unit managing director Margaret Cole left the FSA last month to join PricewaterhouseCoopers.

Richard Hobbs, director of regulatory consulting at Lansons, says: “In effect, the FSA is training the compliance staff of the private sector. The political decision to break up the FSA has caused uncertainty and doubt. Senior figures have also left, which has an impact on staff lower down.

“I do not believe that high staff turnover is a good thing as it means the FSA’s corp- orate memory and all its regulatory experience has gone out the window.”

An FSA spokesman says: “Staff turnover levels fell during the crisis but are now starting to return to the level you would expect as recruitment picks up in the financial services sector and competition for skilled staff increases.”