The Money Advice Service plans to scale back its own service where it believes other organisations are better placed to give people the guidance they need in order to shift focus from money advice to debt advice, according to its chief executive.
The Mas released its business plan for 2015/16 today (30 March). It comes after the FCA confirmed comments from chief executive Caroline Rookes, reported exclusively by FTAdviser, that 20 per cent of the money advice budget would be shifted to debt advice work.
It also comes following an independent report by Chistine Farnish, published earlier this month, which recommend an eventual halving of the money advice budget and radical changes to ensure Mas does not duplicate the services of other providers.
Mr Rookes told FTAdviser the organisation will be doing “further work” on scaling back its service, adding that the plans are “not entirely clear yet”.
The service is already talking to the Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme to find areas of common interest, according to Ms Rookes.
She said that their work with the FCA was mainly focused on consumer issues and that they would be looking at where responsibilities between the two organisations begin and end, sharing research so that they are not duplicating it.
“One area we might want to look at is the telephone service that we all provide - are we duplicating? We have yet to start in earnest. We are starting conversations, but we have to map this work out over the next few weeks.”
Ms Rookes added that it is looking at reducing coverage of comparison tables, although she appeared to rule out scrapping the Mas’ annuity comparison table, using it as an example of the impartial advice they offer.
She reiterated the need to consider the extent to which people can get impartial generic advice, as there is a lot of advice available but it is not necessarily impartial. “We need to look at the sources of advice that are impartial and consider the extent to which impartiality matters.”
Mas’ total budget for the next financial year is £81.1m. Of this figure, £34.1m will be spent on money advice, down £8.9m from last year’s budget.
Its budget for debt advice will be £47m, up by £8.9m. The debt advice budget also includes £3.8m as part of a contingency plan to meet the needs of clients affected by changes to the debt management market driven by the FCA’s new regulation in the sector.
The report stated that savings have been enabled by efficiencies, cuts to some budget lines such as printing and reductions in ‘above the line’ marketing like TV and radio.
When asked whether the shift from money advice to debt at the organisation was set to continue next year, Mr Rookes said that it was a difficult one to predict.
“We know we live in a society where people spend now and we know at some point interest rates will rise and there’s a chance that people will find themselves in more trouble.