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Will the FCA strike affect its work?

Will the FCA strike affect its work?
FCA staff strike out the FCA offices in London. (Fotoware)

At a time when the Financial Conduct Authority is focused on the culture of companies within its purview, the regulator faces its own internal wrangling as it faces staff discontent over recent pay and bonus changes.

When FCA chief executive Nikhil Rathi was grilled by Treasury Committee MPs last December on the plans, he said changes were being made to address cultural issues and simplify pay structures. 

But staff industrial action in response to the regulator’s employment offer could put further pressure on an already overstretched service.

Members of Unite, the union that represents staff at the regulator, voted to strike on May 4 and May 5 and also take part in a continuous work-to-rule, which will consist of staff working strictly to their contracts of employment, job descriptions, shift start and finish times and working hours. 

The key concerns by staff include the loss of routine payments labelled "bonuses", which represent 10 to 12 per cent of salary; the narrowing of pay bands; lower pay bands for Scottish staff; cuts affecting graduate trainees; and a threat of future cuts to pensions.

FCA delays

Rachel Adamson, head of fraud at Adkirk Law, says that while the FCA is not as under-resourced as others areas of UK enforcement, it still faces significant pressures when it comes to the investigation and enforcement of fraud, which has only been exacerbated by the huge increase of fraud in the past few years.

Adamson adds: “Divisions conducting investigations, such as the enforcement and market oversight division, will be particularly hard hit by any absences as they require a huge amount of resource, and this strike action – even if it is of a limited nature – will elongate what is already a very lengthy investigation process.”

Derek Bradley, chief executive of Panacea Adviser, says while any action will have little visible impact on any business or regulated individuals who could be considered ‘bad actors’ with bad intent, it could have an impact on those trying to run a business.

It is understood that 61 per cent (380) of the 624 Unite members participated in the vote for industrial action, with 294 voting for strike action, which amounts to between 8 to 9 per cent of the total FCA workforce.

Adamson adds: “It’s hard to predict the impact of FCA industrial action on the wider financial adviser community – after all, the delays in the decision-making processes and investigations are already so long that it is difficult to see how this strike action will significantly impact their work.

“Financial advisers could be at risk of suffering from authorisations delay, due to absences induced by strike action, which may prevent them from being able to operate efficiently.”

Mel Holman, director of Compliance and Training Solutions, says: “There are [IFA] firms out there who had FCA visits as a result of the DB transfer advice review. Feedback was issued over a year later from the initial visit and the queries have not been closed off mainly due to the delays at the FCA.