Further supplementary Written evidence
submitted by APCIMS
We have now obtained some cost data which will
hopefully begin to satisfy the Committee's desire to learn more
about compliance costs in firms.
Firstly, here is specific data for six of our
member firms with the annex to this letter indicating the types
of firms covered:
APCIMS MEMBER FIRMS:
COSTS OF
COMPLIANCE
| Costs | % of Turnover
| % of Profit |
| Firm A | £280,000 |
4.2% | 8.7% |
| Firm B | £8 million |
3.8% | 18.2% |
| Firm C | £4.1 million |
3.6% | 7.1 % |
| Firm D | £1.5 million |
3.5% | 12% |
| Firm E | £1.07 million
| 1.2% | 1.5% |
| Firm F | £1.37 million
| 4% | 33% |
Secondly, it is worth noting that most of the percentage
of turnover figures in the table above matches with a figure of
3.6% which was obtained recently across a broader sample of our
members as part of an annual survey on costs and trends (ComPeer).
Thirdly, we have also begun to receive specific data related
to how much the total compliance cost (including compensation
scheme payments) has increased in the last few years. Some of
this data will need more work as it needs normalising either because
the firm has changed and/or their business model has changed.
However, it is not unusual to find instances where the compliance
cost has risen by 30% and, in extreme cases, more than doubled
in the last three years.
We trust this gives you and your Committee sufficient information
for now. If we can be of any further assistance, please do get
in touch.
Annex
FIRM A
— Small (Funds under Management)
— Predominantly Execution-only with Advisory and Discretionary
— Headquarters outside London
— Branch offices throughout the UK
FIRM B
— Full Service (Ex-only, Advisory and Discretionary)
— Branch offices throughout the UK
FIRM C
— Headquarters outside London
— Branch offices throughout the UK
FIRM D
FIRM E
— Branch office in Channel Islands
FIRM F
— Branch offices in south England
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