A brief scan of the Money Advice Service (Mas) metrics reveals a potential success story. In 2015 over 8.4m consumers sought guidance, 250,000 customers received debt advice, and 45,000 webchats were conducted through its well designed website.
From its inception, Mas has followed a strategy of directing consumers to its website, the so-called ‘digital first’ approach. Face-to-face and telephone offerings are simply add-ons and not core services. Mas has continually focused on its impressive web-based ‘vanity metrics’. Although it constantly pronounces its admirable visitor numbers, it has failed to change the behaviour of consumers, they have merely been provided with very expensive financial information that is freely available from a number of quality sources.
With over 22m consumers interacting with Mas during 2015, almost exclusively through its website, it has failed achieve its goal of providing guidance and debt advice through face-to-face or telephone-based interaction. Mas simply spent £45m developing its website, and a further £15m a year driving traffic to its confusing array of 28 tools, 77 videos and 300 news items and told everyone what a magnificent job it was doing. This graph shows the levy in more detail.
The government review into Mas published in 2015 was extremely critical of over-spending, poor delivery of face-to-face guidance and in particular its lack of focus on debt-counselling. The review criticised the ‘web-first’ strategic approach and questioned whether the online strategy could make a difference in consumer behaviour. Only 1 per cent of its contacts were through telephone-based interaction, the report surmised. Websites do not change behaviour, they simply provide information. Arguably, debt advice, especially counselling cannot be provided online.
Over its five years in operation, the industry and consumer groups have caught up and diluted their branding and content. Research from the National Audit Office shows, convincingly, that 50 per cent of consumers will seek advice from their bank or building society, 30 per cent will ask, Charities, consumer groups or friends and family, with around 10 per cent using a regulated financial adviser. The review criticised the annual £15m marketing spend, Mas derives 40 per cent of its web traffic though pay-for-click.
The review suggested, “We do not consider it to be good value for money for Mas to develop and publish content that is widely duplicated and available elsewhere”.
| Mas key statistics |
• £318m spent on Mas since launch.* • Board/Directors remuneration (2014/15) over £1.1m.* • 22m customer contacts (2015)* • Total people ‘helped’ (non-web) since launch 606,500. • Average cost £524.30 per consumer helped (face-to-face or telephone) by Mas. • 130 employees with an average annual base salary of £54,400 • £15m marketing spend per year. • 40 per cent of Mas web-traffic is bought by partners or pay-per-click. • £9.25m pa spent on face-to-face, phone and web-chat. • £1.94m on advertising partners providing 8 per cent of its web traffic. • £11.3m spent on 15 consumer research reports £753,333 per report. • Over £45m to develop its web-site with a further £10m planned for this year (2015) • 82,000 telephone calls at a cost of over £1m Source: * Mas Financial Accounts 2015 – Review of Mas March 2015 |
With a flawed ‘digital first’ strategy, poor duplicated content and at a cost of £500 per consumer helped via human interaction, Mas simply lost its way in an already confused market place. Mas just tried too hard to deliver on many financial issues and spent over £300m trying to get it right.
The two fundamental errors that have led to its demise were: Confused, misleading branding as the organisation could not deliver advice; and the unswerving misled belief, that digital strategies would change financial behaviour.
The government this month published a proposal for consultation on realigning Mas to focus on debt counselling and reducing the digital strategy. Mas, Pension Wise and the Pension Advisory service will merge to provide a single, multi-channel service. The government has realized that the majority of services Mas offers for £80m a year are available for free in the market place. It is disappointing then, that it could not have come to this conclusion in 2011.
By the time Mas is closed and replaced in 2018, over £500m will have been spent, the doors will be closed quietly over the next two years, with (I am sure) the odd kinghood to those involved and the industry will forget it funded this appalling guidance misadventure.
Richard Bishop is a lecturer in financial services at Coventry University College and a practising regulated financial adviser
