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FSA spending on staff recruitment hits £4.5m

The Financial Services Authority has spent a colossal £4.5m on recruiting staff in the past 12 months. 

A Freedom of Information request submitted by Mortgage Strategy reveals the regulator has recruited 737 staff in the past 12 months, spending on average around £6,151 for every new recruit.

The figures indicate the rate at which staff are leaving jobs with the regulator.

Earlier this year, it was revealed there was a 30% surge in staff leaving the FSA ahead of the new twin peaks regulatory model, with 430 permanent employees quitting in 2011.

It has also had to seek replacements for a number of high profile figures in the past six months, including a replacement for its head of enforcement, Margaret Cole.

The FSA appointed headhunting firm Sainty Hird to run the search process, which was looking at candidates from North America and Asia. The regulator has paid the recruitment firm £18,000 for its services in the past 12 months.

The latest research from recruitment specialist Hays shows that the average cost of recruiting a senior manager is £7,500 and £2,500 for other employees.

The shocking figures come as support for Mortgage Strategy’s Bring Down FSA Fees campaign gathers pace.

We have been inundated with support from brokers who are calling on the regulator to reduce its annual fee to mortgage brokers following the announcement in its 2012/13 budget forecast that they will rise by 9.2%.

Richard Fox, the former compliance director of the Mortgage Code Compliance Board – the previous self-regulatory body for brokers – says the issue is not so much the amount of money the FSA has spent, but more the fact that it has such a high turnover of staff.

He says: “The rate of staff turnover is horrendous. At the end of the day, the FSA should be promoting the interests of the public and the industry, not acting as a super government department that can just burn money.

“There ought to be enquiries about the level of money it spends in all sorts of areas.

“It is the consumer who eventually ends up paying the price through higher product costs.”

He adds: “The question is, is it offering value for money?”

However, a spokesman for the FSA says its staff turnover levels for this year are slightly down from last year, when they were 10.4%.

He says: “Our staff turnover is not as high as the figures suggest. We fill a lot of the roles internally so when people move to other departments we need to advertise for their roles.”

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Comments
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  • Phil 19th June 2012 at 3:33 pm

    I agree with Gary, we should all go and work for the FSA and then change it from the inside. Either that or sit and take a nice salary with no one left to regulate.

  • TP 19th June 2012 at 10:39 am

    A QUANGO set up by beaurocrats; paid for entirely by its customers; with no accountability to those customers …… what could possibly go wrong ?

  • GARY 18th June 2012 at 12:03 pm

    To be honest this is the best thing i’ve heard in ages.
    After 5 years of living on the poverty line and being bashed by lenders and the FSA, whilst just trying to help honest, hard working clients. It is great news that I may have a chance to secure a very well paid job for a company that has no targets, shareholders or accountability.
    So PLEASE FSA…. CAN I HAVE A JOB????

  • Julian Stevens 18th June 2012 at 10:52 am

    To Bobby ~ the very core of the problem is that there isn’t any independent body to regulate anything the regulator does. The FSA is an unbridled monster riding roughshod over anybody that dares to try to stand in its way and the FSMA, as Hector Sants told the TSC in March 2011, allows it to do exactly that.

    Worse still, any efforts on the part of the TSC to change this ghastly state of affairs will have to overcome the not inconsiderable hurdle that the government has already declared that the FCA, like the FSA before it, will be accountable only to its own board.

    And what still puzzles me is that nobody seems to be making any effort to hold the FSA to the provisions of the Statutory Code of Practice For Regulators, which is even more peculiar in view of the fact that the foreward to that particular item of legislation was written by Pat McFadden who himself is now a member of the TSC. What the hell is going on? It’s a Kafkaesque nightmare.

  • bobby 18th June 2012 at 10:23 am

    When is somebody independant going to look into this disgraceful organisation ? This is shameful and the FSA are just a complete and utter joke now. It is amazing this sort of thing is allowed to continue in the 21st century.

  • Dazed & Confused 18th June 2012 at 10:16 am

    To be brutally honest, the given reason why the FSA are based in London really no longer holds any water. The excuse of being at the centre of the money market just does not stand up. The internet, skype, video conferencing have made it possible to have “face to face” meetings with the two parties many thousands of miles apart. Financial transactions can occur almost simultaneously at the push of a button.

    The Ivory Towers of Canary Wharf are totally unneccesary in this day and age. A nice low cost, environmentally friendly office in the Outer Hebrides should work quite well!

  • Jon T 18th June 2012 at 9:41 am

    Grossly inflated recruitment costs at a time when advisor numbers are falling, thanks in no small part to the regulator’s own actions.

    Irony? No one at the FSA has ever heard of it.

  • John Lacy 18th June 2012 at 9:01 am

    The Regulators (whoever they may be in future) should move out of London to cut their staff and recruitment costs.
    it is total madness to have this sort of recruitment cost in a time where most financial institutions are down-sizing and releasing good quality staff