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Advisers welcome MAS chief’s resignation

Advisers have welcomed the resignation of Money Advice Service chief executive Tony Hobman and called for his successor’s pay to be set considerably lower.

Hobman (pictured) informed the MAS of his decision to resign at a board meeting this week. He has faced a backlash from the Treasury select sub-committee and the financial services industry over his £364,000 remuneration package and the effectiveness of the £87m-a-year service in recent months, which is funded by a statutory levy on the industry. Hobman will continue working at the MAS during his six- month notice period.

The MAS board will carry out a review of the future role and remuneration of the chief executive and aims to appoint Hobman’s successor by the autumn.

Giving evidence to the Treasury select sub-committee inquiry into the MAS last month, FSA chairman Adair Turner admitted to MPs that in retrospect, Hobman’s salary was set “somewhat too high”.

Facts & Figures Financial Planners managing director Simon Webster says: “This guy should not have been allowed to keep his nose in the trough at such a ridiculous wage. It is absolutely obscene. The MAS is sunk. It was a bad idea that was badly executed, which has achieved nothing at huge cost to the industry and ultimately the client.”

Yellowtail Financial Planning managing director Dennis Hall says: “There needs to be a significant pay cut for the chief executive. I wonder whether we are now going see a service that is fit for purpose?”

Essential IFA managing director Peter Herd says: “He has done the right thing because he has failed. The service now needs a massive rethink of its objectives.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Derek Bradley ceo PanaceaIFA.com 5th July 2012 at 8:54 am

    A welcome decision and also good news that at last someone is working a notice period.

    The biggest issue is not the salary but what is delivered for the salary. I hope they get it right next time.

  2. AND what is he going to get as a golden goodbye?

    Betcha lots of money !

  3. Julian Stevens 5th July 2012 at 9:46 am

    I, for one, don’t know quite why Hobman has stepped down. Has his performance to date been judged to have been incompetent or ineffective? If so, given that he’s only been in the post for less than a year, such a verdict seems somewhat premature.

    How big a hand did he himself have in setting his remuneration package? If an interviewing board offers you a job with a large salary plus bonuses and benefits, what candidate is going to suggest the package ought to be less?

    The honourable thing to do (IMHO) would have been for Hobman to accept that his present remuneration package is excessive, point out that it wasn’t he who determined it and offer to continue doing the job in return for something more appropriate. For that, I think, we could respect him.

    Not that I think the industry should be forced to fund the MAS in the first place, particularly the debt counselling element of its activities, which constitute the privatisation of services provided hitherto by organisations such as the CAB and various local debt counselling agencies. Apart from the credit and store card companies and perhaps the banks, debt is not a problem of the industry’s making. And why doesn’t the FSA regulate unsecured borrowing? Isn’t prevention better than cure?

    So just what is Hobman deemed to have done that warrants his resignation? Unless it was he himself who pushed hard for an inappropriately large pay package (which should have been resisted instead of acceded to by the board of the MAS), he just seems to be running away from a furore not of his making.

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