Money Advice Service: IFAs will gain from our work
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The Money Advice Service says it is not designed to compete with IFAs but will drive demand for advisers and their services.
Last week, the MAS launched its free healthcheck service, which acts as a generic online financial planner and links to other MAS services such as budget calculators and comparison tables.
It also rolled out a £4m national advertising campaign which includes a TV ad to raise awareness of the MAS that will run for two months, followed up by adverting campaigns on billboards and online.
The MAS, which was the Consumer Financial Education Body, launched in April and is funded by a statutory industry levy. The healthcheck service asks consumers a series of short questions about issues such as their attitude to regular saving and how they would cope with an unexpected increase in living costs.
It then provides a personalised action plan to encourage consumers to ensure they can cope with a change in circumstances and that they have the right financial provisions for them, such as saving for a mortgage, insurance, or retirement plans.
The MAS says consumers will be signposted to IFAs and other services where appropriate.
It has a budget of £43.7m for 2011/12, with over £2m to be spent on the healthcheck service. In addition to its online healthcheck and website, the MAS has a network of 90 advisers across the UK, covering 250 regional locations and a phone advice service. It is targeting 500,000 users for the healthcheck, 90,000 users for the face-to-face advice service and 90,000 users of the advice line by the end of March 2012.
In a briefing with the MAS last week, Money Marketing asked chairman Gerard Lemos what he would say to IFAs who are angry at having to fund this service which may result in loss of business for them.
Lemos said: “We do not see ourselves as in competition with IFAs. Our job is not to take business from IFAs but to provide information to people who do not have an IFA in the first place. We have to provide a business plan to the FSA and the FSA distributes the cost of that to regulated firms. I understand the implications of the RDR and all the rest of it, but we see ourselves as supplementing demand for IFAs and even driving demand to them.”
On product recommendations, MAS chief executive Tony Hobman said: “We are never going to recommend a specific product to someone because we are giving unregulated advice. What we will do is talk generically about types of advice, which will link through to things like comparison tables but not in a way that recommends one specific product.”
Technology &Technical managing director Kim North believes the MAS should be funded by the Government rather than the industry. She says: “The MAS should put its money where its mouth is and start talking about independent financial advice on its website and referring consumers to IFAs at the end of the online healthcheck process.
“It is misleading for the MAS to say the advice is free, when it is being paid for by IFAs.”
Yellowtail Financial Planning managing director Dennis Hall says: “We are constantly bemoaning the fact that our costs mean there is a huge section of society that do not get advice because they cannot afford it. The MAS ought to help that. But IFAs help people identify their needs, and then sell to make people take action. The MAS will not be able to do that.”
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Readers' comments (19)
ian parker | 17 Jun 2011 9:08 am
As an Ifa and a volunteer presenter for the Money Advice Service,i think this was an ideal opportunity for Mr Lemos,to thank the industry for the funding and also to thank the volunteers for their efforts without which the project would not survive.
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Peter Maxwell-Lyte | 17 Jun 2011 9:15 am
Have you looked at the site?
My impression is that it's very well thought through and I especially like the way they have done the Budget Calculator.
Give credit where credit is due - it may help many people who are nervous about their finances.
But I don't see how it's going to fan people into the offices of IFAs!
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Julian Stevens | 17 Jun 2011 9:20 am
Or, to put it another way, We don't think the IFA sector is doing enough to promote the benefits of its services, so we'll do it for them and, for the privilege, charge them whatever we think it'll take. On top of, that is, everything else they already have to pay to support the existing regulatory structure and all the people who make very nice livings being a part of that structure. And all without any consultation, any Cost:Benefit Analysis or accountability. And we're supposedly living in a free society?
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Lee Tomkins | 17 Jun 2011 9:22 am
If we want to pay for advertising ourselves then we will. We do not need our levy monies being put to uses that potentially see us being made redundant!!!!
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Exasperated me | 17 Jun 2011 9:25 am
One day it will be the only 'IFA' left.
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Anonymous | 17 Jun 2011 9:30 am
It's like the local butcher or baker being charged a levy on their business rates to help keep the costs down for a Tesco superstore.
If the government and the FSA want to make sure good advice is available to everyone, then why have they done everything they can to decimate the independent advice sector ? Instead, they set up yet another quango stuffed with people who will be paid high salaries and gold-plated pensions.
Moreover, do they not realise that there are millions and millions of people (me included) who simply distrust a government agency of any colour or persausion to tell the truth on anything.
You can imagine what this agency's advice will be for a low-paid person asking about planning for retirement ! They won't mention that if they save through a pension, that the tax relief is largely illusory and that any guaranteed income in retirement will reduce eligibility for other State benefits. And it will be Stakeholder this and Stakeholder that with lashings of NS&I.
The only good thing is that general public will use the website as much as the FSA website - not much.
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Bozo in Chief | 17 Jun 2011 9:31 am
When will these bozos realize that trying to educate the public is the path to bankruptcy - not for them, of course - they've already made sure they're on the right side of the fence.
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Anonymous | 17 Jun 2011 10:08 am
"IFAs will gain from our work"?... This is a subjective comment and completely untestable. But then we would'nt want to be tested and found wanting would we?...................................
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Phil Castle | 17 Jun 2011 10:21 am
Whilst I agree with Peter Maxwell-Lyte in that I actually quite like a lot of teh information on the relevant websites my beef is;
1. It should be called money Guidance and NOT Advice
2. It is NOT free and I think the adverts need to be changed to free at the point of delivery, just like the NHS. People need to know who is paying for it
3. Really the MAS should be funded by general taxation and NOT by the industry.
4. Was the name of the MAS & wording of the adverts, particulalry towards the end EVER discussed with the FSAs Small Practitioners Panel?
If not why not?
If it was, why did they let it be named the MAS and what was their opinion on the advert referring to "Free, Independant and Impartial"
The service as it is NOT the problem, in fact I am pro the Guidance Service, it is the title and who is paying which is totally WRONG.
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Anonymous | 17 Jun 2011 10:28 am
I don't understand Kim North's comment in the article "It is misleading for the MAS to say the advice is free, when it is being paid for by IFAs." The advice IS free because the individual doesn't pay. On the same principle that the National Health Service is free, I don't expect to be thanked for helping fund it as a taxpayer!
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