George Mudie MP, chairman of the sub-committee that gathered evidence from across the industry on MAS, called for an urgent independent review into its failings and whether it should be scrapped altogether.
Commenting on the committee’s 41-page report on the Money Advice Service (seventh report of session 2013–14) Mr Mudie said: “In finalising this report, the committee considered carefully whether to recommend that MAS be scrapped completely.
“Given that the Treasury had already announced its intention to conduct a review of MAS, we were persuaded to grant a stay of execution.
“We have asked the government to expedite this review as a matter of urgency. We have also recommended that it should be independent, rather than led by the Treasury.”
The committee is recommending the review to be completed by next summer, whereupon a “credible, informed” decision on the future of the service could be made.
Witnesses who offered written evidence at committee hearings this year echoed concerns about the focus and size of its £19m marketing budget in 2012/2013.
In October, digital marketing agency Greenlight found that MAS lagged behind other financial services brands in internet searches, while an adviser blasted the service in July after one of its adverts appeared on a sophisticated website for share traders.
The committee concurred that the service’s marketing strategy, particularly its costly rebranding exercise, was “misguided”, while it should target only those consumers who are in financial distress.
Concerns over whether MAS duplicates existing services and the £140,000 salary paid to Caroline Rookes, chief executive of the service, were also outlined in the report.
Among those who submitted evidence included the Council of Mortgage Lenders, the Association of British Insurers and the Association of Independent Financial Advisers (now APFA), as well as the IFA Centre, Investment Management Service and the Building Societies Association.
An FCA spokesman said: “We’ll be discussing the select committee’s findings with MAS and the Treasury to agree what further steps should be taken.”
Caroline Rookes, chief executive of MAS, said: “The Service is fit for purpose. Millions of people are over indebted or struggling to make ends meet and we are providing them with the vital help they need.
“The committee’s findings are largely based on evidence taken well over a year ago. Since then, we have, with the FCA, appointed a new chairman and chief executive, and changed the direction of the organisation to focus much more on working with partners to help customers.”
Adviser comment:
David Sheehan, IFA at London-based Opal Financial Management, said: “The MAS website should not market itself as offering advice. Many people are naive and can misconstrue the information being provided, so they are the ones who should be guided towards proper face-to-face advice.”
