A new report from consumer watchdog the National Audit Offence (NAO) has found that seemingly enticing two-for-one offers may not always be all they’re cracked up to be.
When insurance firms were offered, not one but, two regulators (or peaks as they are officially known) in place of Hector Pants’ widely derided FSA, it sounded like a bargain, the mother, in fact, of all regulatory Bogofs.
‘Why settle for a single peak, when you could have two?’, financial services types must have ask themselves excitedly.
Well, the reality has turned out a little differently. Two peaks may not cost twice as much as one, but they do cost an extra £130m per annum (that’s at least 25% more), according to the NAO’s sums.
The national auditor’s report raises serious doubts as to how much regulatory bang financial services organisations are really getting for their buck. “These are still early days for the new regulators,” opined the NAO conversationally, “but the new regulators come at a higher cost borne directly by regulated firms, and ultimately by customers of the financial services industry.”
On value for money, the NAO voiced its concern that many of those currently manning (and/or womanning) the peaks have little or no experience. More experienced staff are deserting the peaks, with annual staff turnover currently around 10%, whilst, of those still up there, more than a third have two years’ experience or less in regulating things. All of which has prompted some commentators to wonder whether we shouldn’t have concentrated on peak quality rather than quantity.
Indeed the wonderings of some insurance types appear to have taken them even further, with some not only questioning whether one peak wouldn’t have done just as well as two, but even whether greater economies still could not usefully have been made by doing away with those pesky peaks altogether.
VFM BOGOF – or overpriced pair?
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