Regulation  

Role of Money Advice Service must change

Role of Money Advice Service must change

The Money Advice Service should have its yearly budget halved and work more closely with the FCA to help consumers in debt, a key report has said.

According to Mas’ 2014/15 business plan, it had a budget of £81m.

In an independent review of the role of Mas, Review of the Money Advice Service, Christine Farnish also recommended the service’s website should be streamlined to point consumers in the direction of other independent, more established, providers of advice including comparison websites and online finance communities.

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The review, launched in May 2014 and led by Ms Farnish, is tasked with making an assessment of the need for consumer education and advice, including how this may evolve following pension freedoms and the increasing regulation of commercial debt management firms

Mas emerged from the Consumer Financial Education Body set up after a 2010 review by Otto Thoresen.

The Treasury, which published last week’s review, said since 2010 the role of Mas, its annual budget and average annual staff salary of £54,400 had come into question.

Ms Farnish said there was still a role for the service, but it needed to concentrate on working more closely with the FCA to make consumers more aware of the availability of free financial advice. She added: “Mas needs to reposition itself at the heart of unregulated consumer information.”

Chris Hannant, director general of Apfa, said: “Why we need Mas to review the report and then government to review that is beyond me. They need to implement these changes.”

Daniel Godfrey, chief executive of The Investment Association, said: “We support the recommendation that Mas should focus on a role as co-ordinator and, where necessary, a commissioner of information and guidance across the universe of financial needs.”

IFS University vice-principal Alison Pask said the organisation is working with Mas to develop a financial education strategy that “enjoys unified support and delivers real long-term change”.

Background

Christine Farnish chaired Consumer Focus from 2010 until its transfer to the Citizens Advice Service in March 2014, and also chaired the Family and Parenting Institute. Before that she was a managing director at Barclays, chief executive at the National Association of Pension Funds, consumer director at the FSA and at Oftel, and held a number of senior roles in local government.

Adviser view

Robin Keyte, director of Somerset-based Keyte Chartered Financial Planners, said: “I know there are a lot of people who are critical of Mas, but I am rather more supportive. I think it is important it does what it does because I am concerned there is now an advice gap and Mas is part of the solution.”