View more on these topics

Adviser backing for ‘common sense’ MAS funding reforms

Money Advice Service

Advisers have welcomed “common sense” proposals to reform how the Money Advice Service is funded, which will see advisers’ total MAS levies fall 93 per cent from £4.6m to £300,000.

The FSA published a consultation this week which says the cost of the MAS’s “money advice” resources should be allocated to the relevant FSA fee blocks based on MAS data of how consumers use its services.

Under the proposals, the total cost of funding MAS for firms in the A13 fee block, which covers most advisers, will fall a massive 93 per cent. Firms in the A18 fee block, which includes mortgage brokers, will see their fees fall from £1.6m to £300,000.

But costs for mortgage lenders will soar by 1,309 per cent from £1.1.m to £15.5m. The figures are based on data which suggests 2.6 per cent of consumers who use the MAS do so for financial advice, while around 30 per cent access MAS for help with getting a mortgage.

Plan Money director Peter Chadborn says: “The phrase that springs to mind is ‘common sense prevails’. It shows how imbalanced the system was in the first place. I am not against the concept of MAS, but I and no doubt other advisers have resented the fact we have to pay so much for it for no direct benefit.”

Yellowtail Financial Planning managing director Dennis Hall says: “This is certainly a better approach and a lot fairer. Clients have indirectly been paying twice – once for their own advice and again for subsidising the costs of those who do not pay for advice.”

But Council of Mortgage Lenders director general Paul Smee says: “Lurches of this magnitude in budget allocation are most unwelcome to firms, especially when based on an unproven methodology. We are going to be examining these proposals very critically.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm