Advisers have hit out at the FSA for setting up a body of its own board members to scrutinise the Money Advice Service, and are calling for a more independent body.
The minutes from the regulator’s July board meeting reveal a special committee will review the MAS’s business plan and budget in detail before they are presented to the FSA’s board in December.
The committee will be made up of a selection of FSA board members.
The minutes also reveal the FSA board demanded an update on the supervision of MAS in September, after it emerged FSA chairman Lord Adair Turner has written to the Treasury several times over the accountability of MAS.
MAS says it welcomes the “closer challenge and input”.
Informed Choice managing director Martin Bamford says the extra scrutiny is positive, but adds the committee should be independent of the FSA.
He says: “MAS definitely needs scrutiny and we have been quite vocal in our opposition to the amount it spends on advertising. However I am not sure the FSA or FCA is best placed to carry out that scrutiny. It should be done by an independent body to make sure the service is delivering good value for money to key stakeholders, which includes the adviser community.”
Evolve Financial Planning director Jason Witcombe says MAS has a huge budget and there is little evidence that it is working, so increased scrutiny is essential.
But he says: “It would seem logical to have a more diverse group of people scrutinising the service, rather than lots of people who all work for the same organisation. Even if there was just one outsider involved then some opposing views can be aired.”
The FSA board minutes show FSA acting chief operating officer Lesley Titcomb, MAS chairman Gerard Lemos and a Treasury representative will appoint the next MAS chief executive after Tony Hobman leaves in January.