The FSA is an out of touch organisation, which has little understanding of the businesses it oversees, an industry report has said.
The survey of more than 3,000 companies carried out by the Financial Services Practitioner Panel on the performance of the FSA revealed that the watchdog is over regulating.
Half of the companies surveyed “strongly agreed” that they were over regulated and another third agreed to a certain extent.
Of those surveyed 29% said that compliance accounts for more than 15% of their total costs. Smaller retail firms were even harder hit with 36% saying compliance costs accounted for more than 15% of expenses.
The report said the financial burden of compliance had damaged the development of new products and services.
In January the FSA will take regulatory control of the insurance industry.
