Over an amazingly short timespan the Money Advice Service has achieved something that has continually eluded APFA, the PFS and the IFS. It has managed to unite advisers of all persuasions in condemning it as a white elephant.
The proposed MAS budget for 2013/14 is £78.3m, an outlay funded involuntarily by the industry. Advisers have expressed concerns about both the budget and the mindset that permeates the MAS and Adair Turner also entertained apprehensions when he wrote to Mark Hoban in 2012 explaining that the MAS should either be fully independent of the FSA or fully accountable.
Over the past year MAS has shed directors at a rate almost a swift as the FSA with CEO Tony Hobman and chairman Gerard Lemos both parachuting free within a 12 month period, always a sign that something is wrong.
Critics have savaged the MAS as an expensive and poorly run equivalent of the Citizen Advice Bureau and there is a measure of truth in these views.
Unlike the MAS, the CAB is a registered charity run on donations and the support of 21,500 volunteers with a nationwide collective of offices where consumers can visit and speak to volunteers including solicitors, financial advisers and accountants. The MAS is online enabling questions and interaction via a textbox facility.
I recently paid a visit to the MAS website to see what I could learn about protection. The income protection pages were detailed and useful although it did feed me through to the Which? website which still contains 2012 gender-adjusted premiums.
I then looked at critical-illness insurance where the site contained easily understood pages such as “Do you Need It” and “Where To Buy It”. The information was clearly set out and simply written using plain English.
However, scratching below the surface, I noted a number of disturbing elements.
One of the pages contained specimen rates and, whilst I realise that no such page can ever be accurate due to rate volatility, I believe that retaining rates dated 10 March 2010 could be considered somewhat lax.
Of more concern is the page titled, What Does A Good Policy Look Like?
In describing this theoretical plan it advises readers to “consider the list of illnesses reproduced on the life and critical-Illness website”.
This website belongs to a firm of advisers called 4-Sight Financial Ltd that claims to have been specialists in critical illness insurance for six years.
Am I alone in believing that it is totally inappropriate for an industry funded quango to be pointing consumers towards a site operated by one particular firm?
Okay, the site provides links to Unbiased and two other adviser databases but the patronage of one firm raises yet another question mark against the MAS and must be considered bad form.
Or it would be if the firm was still trading – the FSA register advises that it deregistered in August 2011.
Alan Lakey is partner in Highclere Financial Services