The soaring cost of regulation came home with a thump with a report this week from the FCA that its average salary is now over £71,000 a year - more than double the mean UK average.

With over 4,900 employees employed by the FCA (sharply up due to regulating crypto and funeral plans) that’s a wage bill alone of nearly £350m a year by my estimation.

Many readers will have raised an eyebrow at average FCA pay increases of 4.8% this year (more to come with performance reviews in October for some) and some staff receiving pay increases of 11.2% but, of course, the regulator has to pay well to recruit and retain the best staff.

There is a good case to say that without motivated, well paid and well trained staff effective regulation by the FCA of the highly complex financial services sector is a non-starter.

Many of the scammers, crooks and fraudsters the FCA chases are cunning and adept con artists who need to be tackled by people with the skills to deal with them. That's a given.

Equally many readers will no doubt not be receiving this year increases of the kind paid at the FCA so there is a case for balance. The FCA must not be seen to be out of kilter with the sector it regulates.

The FCA has been wounded in recent times by strike action over pay, conditions and union recognition and also concerns from lower paid staff that they were poorly paid. The FCA has also dropped completely its bonus scheme and it appears that salaries are being pushed up to account for that too.

The FCA is, of course, based in London, a very expensive part of the country. Expansion of its new regional office in Leeds and a doubling of staff in its Edinburgh office suggests the regulator will be looking to move more work outside London to help control costs. That makes sense.

One interesting factor seen in its latest pay review report is its desire to reduce pay gaps between different groups of staff. This has much to do with ensuring no discrimination against ethnic or disabled staff of women, unconsciously or otherwise. This makes sense and the FCA deserves credit for taking seriously a subject that few employers elevate up their agendas.

Higher paid FCA staff, who are generally well remunerated, have not been receiving anything like the pay increases of their younger colleagues and may well be slightly miffed at this. Given that salaries for senior staff are relatively generous they may not kick up too much of a fuss.

What is more important overall is not the wages bill at the FCA or other regulators but the long term cost issues.

Ultimately salaries at the FCA are paid by levies on regulated firms and there is only so much they can bear by way of costs. There is a need for greater involvement of the regulated sector in decisions on the FCA’s salaries and overall costs.

Compared to Civil Service jobs, salaries at the FCA and similar quasi governmental bodies are pretty generous. With a rising number of staff and more tasks seemingly added on regularly to its list of regulated activities every year there is case for a wider review of salaries and costs to ensure regulated firms are not sunk by a sea of rising costs.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin >Top Tip: Follow Financial Planning Today on Twitter / X @_FPToday for breaking news and key updates