£0.25 billion rough cost of third party reporting

The cost to firms of providing information to customers and third parties other than the regulator and statutory bodies is in the order of £255m per annum, according to research by Real Assurance Risk Management. The total, based on calendar year 2005 figures, is not built up from rule-by-rule estimates, which the majority of the 24 large firms that responded to a questionnaire were not able to provide. Instead it looked at broad categories: supplying product literature cost £36.5m; documentation preparation and compliance review expenditure, £12.8m; transaction confirmations, £0.8m; additional time needed for disclosures, £158.1m; periodic reporting to customers, £39m; and complaints handling, £7.8m. The report notes that the true burden is likely to be significantly higher since the Standard Cost Model methodology employed excludes one-off costs, including those associated with the introduction of new rules. It also fails to take account of internal compliance monitoring expenditure.