Legacy of failed Money Advice Service

The Money Advice Service was set up with worthy intentions but was doomed to failure from the start.

For any product or business to succeed it must deliver what it says on the tin – otherwise, no matter how good it is the people who use it walk away saying it did not meet their initial expectations.

Did the Money Advice Service truly delivery what was suggested by the organisation’s name?

In recent years there have been several reports questioning whether the Money Advice Service was delivering what it was supposed to.

Back at the start of 2015 an independent review headed up by Christine Farnish, the former chief executive of the National Association of Pension Funds, said the service should focus on filling advice gaps in the market and stop duplicating services that already exist.

Ms Farnish proposed changes that would allow the government to halve the service’s then £43m a year budget and would involve the service giving out grants to fill advice gaps instead of trying to offer advice to consumers itself.

What the Money Advice Service delivered was a multi-million pound bill that you and your clients had to pay

It is undeniable that there was – and still is - a need for a service to assist people who need help with sorting out their finances but can not afford fully regulated financial advice.

But the Money Advice Service never truly delivered that much needed assistance.

This week Caroline Rookes, chief executive of the Money Advice Service, outraged some of the advisers who read FTAdviser by stating her organisation dealt with 50 million unique web visits and helped a lot of people.

Advisers in our comments section rightly pointed out web visits did not necessarily translate to help.

Defending the legacy of the Money Advice Service, Ms Rookes also said while her organisation would soon be no more the resources and tools it developed - like the retirement adviser directory – could still be used in the future.

But did the Money Advice Service deliver “free and impartial advice”?

What the Money Advice Service delivered was a multi-million pound bill that you and your clients had to pay to set it up and operate it.

The organisation amounted to an adviser directory – Unbiased and Vouchedfor already offer that - some information about basic money management and debt advice – which was already offered by the Citizens Advice Bureau.

It is time MPs realised once a need is recognised, they shouldn’t just push ahead with their own ideas drawn up on the back of a fag packet and instead ask the wider world for solutions and actually listen to what they come up with.

The Personal Finance Society has regularly pointed out rather than spending millions on creating their own advice and guidance services, a voucher system for financial advice would work far better.

Back in March, FTAdviser calculated cash spent on soon-to-be scrapped government guidance body the Money Advice Service would have paid for more than a million and a half hours of face-to-face advice.

Weighed against the average adviser rate, the cost of Mas’s online money guidance service could have instead bought an hour of full regulated advice each for 1.6m people, FTAdviser calculated.

When you think how many vouchers for “free financial advice” and how many people could have been given top class assistance with sorting out their finances the marketing spend and running costs of the Money Advice Service is enough to make you weep.