A bad start for the Money Advice Service
Assessing the performance of Mas shows an organisation with a ‘confused remit’ that is off to a rocky start.
Maybe it is too early to assess the success – or otherwise – of the free-to-use Money Advice Service but it has hardly got off to a triumphant start. A disastrous debut is closer to the truth.
Launched last June by the government under the Financial Services Act 2010 and born out of the Consumer Financial Education Body, its aim is merited. MAS’s objective is to improve ‘financial awareness’ so that everyone – young through to old – can make more informed financial decisions and be less prone to the financial detriment caused by either misbuying or mis-selling.
It is certainly financially armed to the teeth to do the job asked of it, with an annual budget of £44m, funded indirectly by consumers through a levy applied on banks, building societies and IFAs. Some 140 staff were employed at the start to provide ‘advice’ – primarily over the phone.
Yet since MAS opened its telephone lines and launched its website, things have not quite gone according to plan. It seems that the MAS offices have been occupied by a coop of headless chickens. No one quite knows what they are doing.
It seems that the MAS offices have been occupied by a coop of headless chickens.
The alarm bells began to ring last November when it emerged that MAS was doing a U-turn to match the very biggest of U-turns. Rather than concentrate on telephone-based advice, MAS would in future concentrate on delivering advice through the internet. The result of all this would be that 60 of its 140 staff would be surplus to requirements. They would be unceremoniously sacked.
What made matters worse for MAS was that the chief executive’s salary then came under scrutiny. Tony Hobman (lucky man), we discovered, was paid £350,000 – considerably more than his counterparts at equivalent organisations which are also ultimately funded by consumers through levies paid by banks, brokers (yes, you) and other firms.
To put his remuneration into context, Natalie Ceeney, chief executive of the Financial Ombudsman Service, is paid £225,000 while Mark Neale, boss of the Financial Services Compensation Scheme is paid £250,000. Both jobs, I would contend, are far more stressful in light of the deluge of PPI complaints (Ms Ceeney’s patch) and the continued fallout from the financial crisis (Mr Neale’s domain).
It is also hardly set the world alight in terms of its statutory objective to enhance the understanding and know-ledge of members of the public about financial matters and the ability of members of the public to manage their own financial affairs.
Indeed, the latest research MAS has done into the effectiveness of its £2m online healthcheck will hardly get hearts racing. Of the 1000 surveyed who completed the healthcheck, 300 did not remember doing so while 371 failed to adjust their finances as a result. A third said the healthcheck had played some role in changing their behaviour towards financial management.