A few days after April fool’s day, the Consumer Finance Education Body rebranded as the Money Advice Service, offering free, clear, unbiased financial advice.
If this service was aimed at and committed to only helping the “coping classes”, I would welcome the initiative with open arms. A Friends Life report issued last week says 59 per cent of middle-income households would be unable to provide for themselves and their families for longer than six months if they lost their main source of income and over half of people unemployed in the UK have been so for over six months.
This group makes up one in five UK working adults in the UK and this group shops around to reduce their debt to help them survive the effects of the downturn.
The Money Advice Service, however, offers workplace information to companies, including Rentokil, Capita, UK Police and Marks & Spencer. Not exactly industries with minimum wage and lacking in benefits.
In order to provide the workplace “advice”, existing advisers get one day of Money Advice Service training, then go into the workplace to deliver financial information.
Once the presentation is finished, the employee has the adviser’s business card and is likely to call him or her for proper client-specific financial advice. The Money Advice Service does not provide advice, it is education. It would be interesting to see who these advisers are? Are they QCF level four and whole of market IFAs? Or restricted advisers? Or a combination of both?
It worries me if tied advisers are dishing out their cards in the workplace under the guise of a Government-backed free advice service. It is not advice, it is education and unless it is delivered by a whole of market IFA, it is not unbiased.
And it is not free, as regulated financial services companies pay a fee to run the service. It is beyond me why the service is funded by £43.7m from financial services firms regulated by the FSA. It should be funded by Government money.
I would love to be able to redirect a £43.7m annual budget to, say, Unbiased.co.uk who year after year have over half a million people seeking an IFA and generate more than 7,000 positive press mentions a year for IFAs. All this on an annual budget of £2m.
Why should IFAs freely listed on www.unbiased.co.uk pay for the Money Advice Service, especially as it is in competition for corporate clients such as the police and Marks & Spencer?
Informed Choice expects to pay £900 towards the cost of funding the enterprise this year. Martin Bamford’s blog on the issues states a “better name for this project would have been The Money Guidance Service. There is a world of difference between advice, which is specific and regulated, and information or guidance.”
I am relieved that Aifa director general Stephen Gay says he believes independent advice will remain the gold standard as members await a decision on whether the trade body will admit restricted advisers after the RDR.
Please can Aifa just lobby on behalf of IFAs in the future and not for restricted advisers with a handful of company ties as there is a world of difference in the needs and activities of independent and restricted advisers. These differences are what the Money Advice Service should consider.
Kim North is managing director Technology & Technical