The Budget announcement that the Money Advice Service is set to make way for a new financial guidance delivery model has been welcomed by several advisers.
A consultation into the design of the new body detailed many of the issues raised by the existing public financial guidance consultation, including criticism of duplication between Mas, The Pensions Advisory Service and Pension Wise.
The document stated: “The approach that Mas has taken to contracting out debt advice was broadly supported, but there was a clear view that Mas has tried to deliver too much on money guidance and financial capability, that it has duplicated services offered elsewhere in the market and that it was not able to demonstrate improved outcomes for consumers, in part because of an unclear statutory remit.”
The government will consider responses to this consultation over the summer and will work closely with the affected organisations.
A final response to what approach will be taken to delivering guidance is due in the autumn.
The Budget document added that the new model “will direct more funding to the front line and focus support on areas of greatest consumer need”.
Caroline Rookes, chief executive of Mas, responded her organisation will work with the government to fully consider the implications of this announcement. “In the meantime we will continue to fulfil our statutory role to help people make the most of their money.”
Tpas’ chief executive Michelle Cracknell said she was pleased the importance of pensions guidance and its special requirements have been recognised.
“The DWP will be working on the building of the new organisation and we look forward to helping them with this important work. This is an essential public service in order to support people in making proper provision for their retirement.”
Phil Billingham, compliance and operations director at Perceptive Planning, suggested there was never any reason why the Citizens Advice Bureau could not have received additional support and delivered the guidance Mas was set up to offer.
“The concept behind Mas as a separate body was flawed. The name was misleading, the funding was always a bit of a scam, then the hubris and sheer greed of the initial management and staff ensured that the only people who really benefitted from its establishment were the Mas management and staff.
“Once this train was running, then it had to be positioned as ‘anti adviser’ in order to justify taxing advisers to fund a ‘wannabe’ competitor. Hence the carefully scripted comments casting aspersions on advisers ethics.”
He added that hopefully lessons have really been learned and that any new body is focussed on delivering information and guidance about critical matters to those that need it. “I do hope that someone is appointed purely to control any future management and prevent past mistakes being repeated.”
Malcolm Coury, managing director of Money Wise Independent Financial Advisers, called the news astonishing. “It is an incredible climb down, so the chancellor should be applauded for his bravery,” he stated.