Money Advice Service to play ‘big role’ in RDR education

The Money Advice Service will have a “big role to play” in helping consumers to understand the changes that will be wrought on the advice sector following the implementation of the Retail Distribution Review rules, chief executive Tony Hobman has said.

Speaking to FTAdviser on the launch of the Financial Services Authority’s funding requirements for 2012-2013, Mr Hobman said there was a “generic understanding” of advice among consumers but there was “not enough understanding” of different advice types.

Questioned as to what the service will be communicating to consumers, Mr Hobman said he “didn’t want to pre-empt” the approach that it would take, but that the principles of the RDR would be “shot-through” all of its discussions with consumers on advice.

He added the Money Advice Service would seek to explain what ‘restricted’ and ‘independent’ advice means in a “very clear, user friendly” way.

Mr Hobman said advisers should not see the Money Advice Service as a competitor for business, saying it was “absolutely not in any way competiting with regulated advice” and that its work should help to “create a much bigger market for advice”.

The FSA’s paper proposes increasing the Money Advice Service’s budget from £43.7m to £46.3m for the next financial year.

In addition, Money Advice Service has been given £40m to help set up an extended face-to-face debt advice service, consolidating the work of 16 schemes being run by, among others, the Citizens Advice Service.

The Financial Services Authority’s overall budget requirement was increased 16 per cent to £578.4m, with the regulator saying the rise would be “borne mainly by larger firms”.

Around £32.5m of the increase, equating to approximately 28 per cent of the uptick in the funding requirement, is attributed to costs for disbanding the FSA and launching two new regulators, which the watchdog said was “within the overall estimates set by HM Treasury last year”.