Following on from the regulators £35,000 fine to RHL, due to its worries at the amount of outside consultancy the firm used, the FSA has been accused of double standards, with findings revealing that the FSA has spent millions on outside consultants over the past few years.
The findings included; money paid to legal services; IT services; and translation services as part of the 64-page document. The document included legal services accounting for over £1 million for April 2004, and June 2002, in addition to project consultancy totalling over £150,000 for a single transaction.
Peter O’Donovan, mortgage manager at Bestinvest said the FSA’s expenditure on outside consultants proved interesting reading. He said: “The regulator publishes a lot of information and statements but most of it is ‘woolly.’ The fees the FSA pays to outside consultants wouldn’t be so bad if there was a clear message gained at the end of it, but this is not the case.”
However, Abi Jones, spokesperson at the FSA, said: “The FSA does not discourage any regulated firm from using external consultants but in this case, RHL’s management relied to an inappropriate extent on an external consultant for overseeing compliance-related matters and ultimately for ensuring the fair treatment of customers. It was not about the time or money spent. As with many large organisations, the FSA calls in external consultancies where it is more cost-effective, for example, in the case of translators. This is not unique to the FSA and we will continue to review our practices to ensure we are being cost and time-efficient.”
