We use cookies to improve site performance and enhance your user experience. If you'd like to disable cookies on this device, please see our cookie management page.
If you close this message or continue to use this site, you consent to our use of cookies on this devise in accordance with our cookie policy, unless you disable them.

In association with

Home > Opinion > Jeff Prestridge

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.

By Jeff Prestridge | Published Mar 15, 2012 | Regulation | comments

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.

Page 1 of 3


Our Columnists

Hal Austin

Hal is editor of Financial Adviser and has been for more than a decade. He has previously worked on a number of local and national publications.

Ashley Wassall

Ashley is editor of FTAdviser and writes on all areas of retail finance. Previously supplements editor at Money Management and editor of a European private equity publication.

John Kenchington

John is editor of Investment Adviser and has written about investments for several years. He has worked at titles including City AM and was recently named in the MHP 30 To Watch list of up-and-coming media names.

Jon Cudby

Jon is editor of Money Management and has 12 years' experience covering retail personal finance. In 2005, Jon was launch editor of FTAdviser and most recently he was head of online content for Incisive Media's financial services titles.

Tony Hazell

Tony is a freelance financial journalist, having been editor of Money Mail at the Daily Mail for a number of years. He has been writing a column in Financial Adviser since 2005.

John Lappin

John is a weekly contributor to Investment Adviser with 15 years’ experience in financial journalism and 10 years writing on the IFA sector. He was formerly editor of an IFA trade magazine.

Most Popular
More on FTAdviser
FTA jobs