An independent review of the Money Advice Service that has now been confirmed by the Treasury must examine whether it should exist as a statutory body and also if its statutory arrangements are “sufficiently robust”, according to Andrew Tyrie.
On Friday (30 May), Andrew Leadsom, the economic secretary to the Treasury, announced the launch of the much-anticipated review of Mas, to be led by Christine Farnish, who was previously chief executive of the National Association of Pension Funds.
However, Mr Tyrie, chairman of the influential Treasury Select Committee which earlier succeeded in its call for the review to be independent of the government, said that the terms of reference “appear to omit several important issues”.
In particular, he said the review must assess the service’s statutory status and examine whether its governance arrangements are “robust”.
He said: “The announcement today of an independent review of the Money Advice Service, as requested by the Treasury Committee, is welcome.
“The terms of reference, however, appear to omit several important issues from the scope of the review, including whether the Mas should exist as a statutory body, and whether its governance arrangements are sufficiently robust.
“Clarification is needed, before the reviewer starts her work, that the Treasury expects her to examine these issues.”
The Treasury said the review will “make an assessment of the need for consumer education and advice, including how this may evolve” and what Mas’s role should look like in the wider education and advice landscape.
It will also assess how effectively and efficiently Mas is meeting this need through its current approach and delivery models. The review will also recommend any changes to Mas’s approach and delivery models “that would enable it to better meet this need”.
In April 2013, the Treasury said it will undertake a two-year review of Mas between 2013-2015 to assess its continuing suitability after a period of intense scrutiny for the organisation.
In a framework document agreed between Mas, the Financial Conduct Authority and HM Treasury, the Treasury confirmed it would subject Mas to regular reviews and would constantly assess its key objectives.
Mr Tyrie previously said that an independent review, rather than a Treasury-led review, was “essential”.
Ms Farnish described Mas’s independent review as “timely in view of the considerable public interest and debate around the service, the new regulatory framework and the government’s recent announcement on pensions”.
She said: “I will be taking a thorough look at Mas, including what it does and how effective it has been in meeting consumer need to date, and I will recommend any changes that would better enable it to meet this need.
“I will report to Ministers by Christmas and look forward to hearing from all stakeholders with an interest in helping ensure consumers are more savvy about managing their money and getting a better deal from financial services markets. I will be publishing a call for evidence very shortly.”