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All adverts should point to Money Advice Service, says thinktank

The Social Market Foundation says all financial product advertisements should refer customers to the Money Advice Service.

The thinktank’s report, A Confidence Crisis, Restoring Trust in Financial Services, published today, says the move would increase competitive pressure on providers who currently rely on cross-selling.

It says: “We propose extending to all financial products the principle currently behind the open market option for annuities. All product advertisements, including deal offers from firms by email, would refer customers to the Money Advice Service website to consider alternative products.”

The report says the MAS is trusted and the move is necessary because of low trust in intermediaries. Research of over 2,000 people in the report suggests only 38 per cent think IFAs act in their best interests.

SMF senior researcher John Springford says: “Whatever the reality, many people still view IFAs as salespeople.”

But IFAs fared well compared with tied advisers. The research says 30 per cent of people trust multi-tied advisers to act in their best interests and for single-tied advisers that crashes to just 6 per cent.

The report says the RDR is essential to restore trust after the “complicity” of advisers who had been “captured by provider interests” after a string of scandals.

The SMF backs industry concerns that the RDR will create an advice gap and suggests introducing Government-backed kitemarked products for mass-market products or state subsidies for financial advice.

Springford says: “Given the deficit, subsidising advice is unlikely to be music to the Treasury’s ears, so perhaps that is something for the next spending review. The kitemarked products might not be the cheapest available but they would be straightforward and trustworthy and if an adviser wants to sell something riskier and cheaper they have to explain why it would be better for the client.”

Derbyshire Booth Financial Management managing director Greg Heath says: “MAS is still a very new service and an unknown quantity, so to say refer everything to them could be a premature leap of faith.”

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. I rely on cross selling. I do a good job in one area and in the majority of cases, the client does other business with me as a consequence. What is the problem with this?

    I have to say I don’t listen to a left of centre think tank who are irrelevant to people who can afford financial advice anyway. The way in which this ‘think’ tank wrote the questions for people to answer was deliberately intended to get the response they did (in my opinion).

    Here’s a newsflash for someone like Springford who has never worked in the industry…

    PEOPLE DO NOT BUY LIFE COVER, THEY ARE SOLD IT!

  2. I just don’t believe all these statistics – if only 6% trust a tied adviser, how come so many people get ripped off by the banks?
    And what makes them think that the MAS is trusted? It’s all nonsense to try to justify their wages.

  3. I agree, yes direct them to MAS but only if they in turn promote Independent advice and stress visitors to MAS should consult IFAs if they are in any doubt.

  4. This sounds fine and dandy until you go onto the MAS website, answer questions for a specimen client and see the drivel that comes out at the other end! It’s probably hardly surprising that if you tell the system you have no vehicle in place to repay your mortgage that it tells you you should find a way of saving money to do just that. I really don’t know how many thousands of pounds and millions of man-hours it took to set up, but it doesn’t particularly strike me as time or money well spent and I really cannot see it doing very much to enhance the image of the industry or engage potential customers.

  5. And yet in May this year The Read Group surveyed 2,330 consumers and concluded that IFAs are the financial services provider most trusted by consumers.

    The survey found that lenders, credit card companies and price comparison websites were the least trusted types in financial services.

    That would presumably include price comparison sites like the inappropriately named Money Advice Service?

    Are you, like me fed, up of these ill-informed commentators telling us that we are not trusted? I can think of no one I would trust less than a “Think Tank” which must constitute the best/worst oxymoron known to man. What a wast of time and money these people are!!

  6. Two questions:

    1.Who will determine the suitabilty of a kitemark product

    2. Who is liable if it is subsquently discovered that the that particular kitemark product was not fit for purpose.

    I am only asking so in future years I know who to direct the clients to who wish complain.

  7. The trouble is that this “Money Advice Service” is nothing of the sort.. It doesn’t give advice, and if you do want advice you need to see an adviser. It really is a load of old rubbish…

  8. Another Pissed Off IFA 13th July 2011 at 3:34 pm

    This reminds me of the Monty Python sketch–…

    I thought you said this is a Think Tank!

    Ah, that’s just the sign….

  9. The average consumer wouldnt know the difference between tied, multi-tied or IFA.

  10. Poppycock.

    How can they claim MAS is trusted when it has been running for such a short space of time.

    They are hardly going to be many negative views as they haven’t messed up on anything yet.

    I would also like to see the wording of the research which claims only 38% of people thinks Independent Financial Advisers act in their best interests (and how many of those have actually dealt with one).

  11. A face you’d never tire of slapping!

  12. We get what we deserve 13th July 2011 at 5:28 pm

    Why does the financial press give this drivel air time. Why not give the report to reputable financial reporters to tear apart and discredit them and show them up for what they are ie IDIOTS! the financial press really has to take some of the responsibility for the current situation by not making a stand against these people. Yes headlines sell but the truth needs to be ‘stood up for’ and the papers have the base from which to shout about injustice from the rooftops. History will judge us as a society that was frog-marched in the financial gas chambers whilst everyone looked on.

  13. I’m surprised to see that the Social Market Foundation would call for all financial product advertisements to include a call to action to contact the Money Advice Service. The Money Advice Service offers guidance for consumers wanting to find out basic information about financial options, rather than offering advice on the suitability of specific financial products. When it comes to helping consumers make an informed decision on whether a product is suitable for their needs and which provider offers the best deal for their individual circumstances, they are best served by getting advice from an independent financial adviser. Directing consumers to the Money Advice Service, with an expectation to get tailored advice on their financial circumstances, will only lead to confusion. Whilst the Money Advice Service provides important information and generic guidance it does not aim to and, more importantly, it isn’t regulated to provide financial advice.
     
    Consumers looking to get advice on the best financial options available to them, across the whole market place, should seek advice from an independent financial adviser.

  14. Why would you trust the MAS if the government/FSA is behind it? Do you trust either of tthose two to get anything right?
    what about the newspaper such an advert might be placed in? Do you trust newspaper people?
    What about the police? do you trust them not to sell your details? What about think tanks? why would you trust them? Do you even know anything about them? etc etc etc
    What a load of old rubbish! Why is no one commissioning a report on “A confidence crisis,
    restoring trust in the powers that be”including think tanks who can make a survey say whatever they have decided they want the answer to be.
    Utter drivel.

  15. Another need-a-brain-before-they-can-think-tank with “strange” ideas! Who pays for these idiots?

  16. NO, NO, NO.
    If the MAs had been called teh Money Guidance Service, the argument could be put that ALL advertising could have referred to the MGS as somewhere to find basic information and that if someone needed advice, to got to an IFA.
    The Moneymadeclear website was fine and the info on the MAS website is helpful and having just got my F-pack annual bill, the £10 set aside for it I am happy to pay, BUT it is not FREE, it is not ADVICE and it is NOT INDEPENDANT/IMPARTIAL and should be rebranded to the MGS before some consumer actually takes legal action.
    If that is done, then I’ll support it, until then, this is a LIE.

  17. Yet another quango sitter (what the hell is the Social Market Foundation give me bloody strength) !!!! talking absolute cobblers about things he knows absolutely nothing about.

    Ordinary people do not go to things like the MAS and proactively go and buy as a result they need to be sold concepts – given the choice of going down the pub for a pint or buying a life/savings policy the bloke we most need to get saving again is going down the pub – THATS IT IN A NUTSHELL – WE SELL TO CLIENTS THEN THEY BUY !!! HELLO WAKE UP SMELL THE COFFEE -BIN MAS AND RDR and enable IFAs to sell regular premium products to the mass market that is what the market is crying out for !!!!!

    This is yet more interference from people who have not the first clue about how the world works and how free markets work – until they do as Private Fraser used to say We’re doomed.

    By the way, cant wait for the TSC report – that will be the most damning enditement of the FSA yet lets make sure we all capitalise on it as soon as it is released !!!

  18. Apologies in my anger spelt indictment wrongly !!!

    – but you know what I mean !!!!

  19. Julian Stevens 15th July 2011 at 1:18 pm

    As I understand it, the MAS was launched with no industry consultation, with no Cost:Benefit Analysis and there are no plans to undertake any sort of Cost:Benefit Analysis after it’s been running for a year so we can see whether or not it’s actually delivering what was hoped for it in return for our compulsory levies to fund it.

    What if the overwhelming feedback from the public is that the MAS has told them nothing that they couldn’t reasonably have figured out for themselves, that it doesn’t offer advice other than in the most generalised and generic terms and that, in fact, the only way to obtain a tailor-made financial planning strategy is TO PAY FOR IT?

    Will the MAS then be forced to admit that, in reality, it’s been nothing more than a bit of window dressing and a job creation exercise? Apart from anything else, who considered there to be any need to replace the FSA’s Moneymadeclear service (which produced a whole series of very good information booklets)? Just an excuse to hive off part of the FSA and charge us yet more bloody levies for the privilege.

  20. Derek, the points you make are spot on.

    People have been totally frightened off regular premium products by past bad practice / products.

    You are not going to get your guy to save regularly rather than go down the pub especially when he knows full well the result of his thrift will benefit him not one jot compared to his mates that did go down the pub.

    The MAS site is excellent and I actually agree that all financial product ads should point to it.

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