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Categories:Regulation

FSA sticks up for MAS "free advice" advert

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The FSA says it fully supports the Money Advice Service’s controversial TV ad despite a barrage of criticism from IFAs concerned about the message it sends to the public.

The 30-second ad, part of a £4m campaign, began airing last week and includes a voiceover which states: “Our advice is independent and unbiased. Oh, and it is free. How is that for a breath of fresh air?”

The ad (see below) has been widely criticised by advisers who are worried it suggests to consumers that advice is free and uses symbolic words associated with regulated independent advice.

There has also been concern that the message contradicts the retail distribution review goal of ensuring consumers understand the price and value of advice.

However, when questioned about the ad by Money Marketing at a conference in London this week, FSA director of conduct policy Sheila Nicoll said the MAS is clear in what it is offering. She said: “It is worth noting the MAS is very clear that it is generic advice that it is providing. What the MAS is proposing is actually pretty complementary to the RDR.”

The MAS is an independent body funded by an industry levy which amounted to £43.7m this year. Advisers began receiving their FSA invoices this week which included the costs of their contribution to the MAS.

Aifa director general Stephen Gay argues that the public may be confused and potentially misled by the ads.

He says: “The use of the phrase ’independent and unbiased’ advice is not helpful. What the public understands by advice is going to somebody who knows more about a particular subject, who will help, who is on their side and, most important, who will take responsibility for that advice. We should not endanger this concept by inappropriate use of language.”

Michael Philips owner Michael Both says: “A national advertising campaign talking about free advice as ’a breath of fresh air’ is wrong.

“If the FSA is remotely serious about getting the public to appreciate there is a value to independent advice, then it should not support this advert. The MAS is not giving advice, it is an information service.”

Unbiased.co.uk chief executive Karen Barratt says the use of the term “unbiased” could give the IFA search service a boost as more consumers may search for the term online. She adds: “The word that I have a problem with, like the rest of the IFA community, is advice. I think it is actually information.”

 


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Readers' comments (39)

  • As long as they are not allowed to recommend a product, or refer to a particular provider, IFA then it is OK.Many people are intimidated about approaching IFA's assuming, wrongly, that they are for rich people only. (To be frank, do you honestly want the kind of customer who is likely to call this type of service).

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  • Since 1985 I have been offering free generic advice to those who ask a simple question, nothing new here then?

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  • Bonkers, how many other businesses in the UK are forced to pay to create competion? When was the last time you heard of the local grocer offering to pay the rent at Tescos.

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  • Why didn't the FSA consult those who are going to be forced to pay for it on just what it intended to achieve with the MAS and how it would be presented to the public? Is even its name, for example, a good or appropriate choice? What was the thinking behind changing it from the MGS? Then again, would the FSA have taken any notice of whatever feedback it received? Or is it just another case of We think this is a good idea, this is how it's going to work, this is what it's going to cost, so just pay up or pack up.

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  • Without sounding really silly, and many would say I usually do, but, .... Why should we pay for this?

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  • i read many of these email/online articles, many about subjects such as these, RDR, TCF all mainly related to how the FSA are doing what they want, when they want.

    Generally commentors like Stephen Gay says..Micheal Both says.. Karen Barrett says..waffle on about we don't like this or that and absolutely nothing gets done about it. WE ALL allow it to happen, they and we might as just well go back to moaning about the weather!

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  • I think the FSA needs to decide which side of the fence it wants to sit. Set the rules and stop changing them. Too much too soon and all being pushed through far to fast to try to beat EU regulation.

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  • Surely the more people made aware of the need to seek advice the better.
    I know for a fact ( My friend is an "adviser" with the programme) that the vast majority of people they interact with need basic financial education.
    Anyone who is seeking more specific advice is recommended that they contact an Independent Adviser.
    Surely this is better than having to compete with the man in the pub.
    The fact is that most advisers have ( for business reasons ) already decided that they are not interested in dealing with this part of the marketplace .
    This does not mean that IFA,s have the copywrite to the term "advice".
    I am afraid most IFA's abdicated their responsabilities for this many years ago.

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  • This is a glimpse of the post-RDR world. The downward pressure on fees will mean that IFAs as we know them will disappear. This includes the so-called fee-based advisers now. There are no fee-based advisers while there are commissions to rebate or compare with. Come to think of it, many of the so-called fee based advisers now are really unit trust advisers and can hardly be considered IFAs.

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  • That the FSA is unaccountable and out of control is hardly indisputable but to give the public the impression that they can magic 'free advice' from nowhere deceives nobody. Jo public knows full well that if it's free it's not worth anything.
    If the MAS really recommends independent advisors to enquirers, it should be honest and make it clear that the advert and supporting information source is paid for by independents. That way the industry might just have a little confidence in one part of the FSA and the direction of its policies and the public too.

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