The Money Advice Service (MAS) was set up by the Government to offer advice on financial matters via its website, by phone and face-to-face via a network of Money Advisers. It was originally called the Consumer Finance Education Body, and assumed responsibilities from the Financial Capability division of former regulator the Financial Services Authority on its foundation in 2010. It seeks to improve understanding and knowledge of finance and to improve people’s ability to manage their financial affairs. It has recently conducted a high-profile television advertising campaign using the slogan ‘What does MA think?’
It provides a very comprehensive website, containing information on:
• Managing your money, e.g. budget planning and money saving tips
• Dealing with life events, e.g. redundancy, divorce
• Money topics, e.g. life insurance and savings products
The site also includes its own price comparison facility, similar to that offered by the well-known commercial operators in this area.
Most controversially though, the MAS is not funded via general taxation, but via a levy on Financial Conduct Authority (FCA) regulated firms. In 2012/13 the MAS received £46.3 million of funding in this way, according to an FCA consultation paper. By improving the financial literacy of the general public, it could be conjectured that the existence of MAS would make people less likely to seek financial advice from their local adviser. Given that advisers have to pay for something that may result in them getting less business, understandably the MAS is not popular amongst many independent financial advisers (IFAs).
Back in July 2011, IFA promotional website Unbiased.co.uk accused the MAS of failing to meet promises to direct customers to IFAs. In September 2011, the Financial Times Intermediary Forum heard from advisers calling for the MAS to be given specific performance targets, e.g. the number of people it helps to get into the saving habit.
In April 2012, a member of staff from advisory firm PanaceaIFA phoned the MAS, posing as a customer, and established that their adviser was unaware of the impending Retail Distribution Review. Derek Bradley, chief executive of PanaceaIFA, had already expressed his fears about the MAS by saying: “Should [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][IFAs] fund a project that has the potential – intentionally or not – to put them out of business by providing advice that firms would and could charge for post Retail Distribution Review?”
Advisers have also questioned whether ‘Money Advice Service’ is an appropriate name. Whilst what the MAS does may meet a dictionary definition of giving advice, it does not carry out the same adviser function as would your local regulated practitioner. It has been suggested that its role of providing general information means that ‘Money Information Service’ or similar would be more appropriate.
The MAS is accountable to the authorities in several ways. Its board of 12 people is appointed by the financial regulator, the FCA, and its Chairman and Chief Executive need to be personally approved by HM Treasury. Its annual business plan and budget are subject to approval by the FCA, and it must also consult with the Department for Business, Innovation and Skills; the Office of Fair Trading; and the FCA’s Financial Services Consumer Panel and Smaller Business Practitioner panels regarding the business plan and budget.
So the MAS may provide a valuable service, given the regularly available statistics about levels of financial illiteracy in this country, but is it appropriate for the advisory community to pay for it?[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]