Last week Money Advice Service launched a new Financial Capability Strategy – a 10-year strategy to improve the financial capability of the UK.
The MAS exists to help people manage their money better, but with financial capability remaining stubbornly low it is clear that we cannot do this on our own.
We need a collaborative approach to bring about real change. We cannot do it without the support of government, financial services, charities, advisers and intermediaries, all working together to deliver maximum impact.
This strategy was developed on the back of extensive collaboration and consultation. We also conducted consumer research to gauge people’s skills and knowledge, as well as their attitudes to money.
Our research produced some worrying results. One in five people in the UK cannot read a bank statement, and 40 per cent of the adult population do not feel in control of their money.
The reality is that there are a lot of people in the UK who need help but who do not have the basic skills to know what help they need, or where to go to find it.
Getting people to engage with financial help, whether guidance of the sort provided by MAS and others, or regulated financial advice, is difficult.
Only by achieving a real change in people’s approach to money management can we hope to see more people in a position where regulated financial advice is a realistic proposition.
Only by empowering people with key financial skills can we hope to see an increase in the number of people saving and building their financial resilience.
It is at this juncture that regulated advice can play an important role in helping to guide consumers through the maze of financial products to find a solution that is right for them.
Advisers are working hard on finding new ways to reach a wider group of consumers, developing new advice models and using technology to deliver advice in a more cost-effective way.
We want to work with advisers and regulators to encourage innovation, while ensuring that strong consumer protection remains in place to underpin trust in the system.
We have been working hard to make sure we constantly engage with the adviser community, finding ways to improve the journey from free guidance to regulated advice.
The retirement adviser directory hosted on the MAS website is a great example of this, with latest figures showing it has driven over 9,000 consumers to adviser websites or contact details.
The Financial Advice Market Review, and the Government’s review of public financial guidance, present the opportunity to ensure that guidance and regulated advice are meeting the needs of all consumers.
I am confident that we can use the opportunity the Financial Capability Strategy gives us to work together more closely to help consumers get the advice they need to make the most of their money.
We will be engaging with advisers and many other organisations over the coming months to discuss how we can work in partnership to implement the strategy and I hope that many of you will be keen to get involved.
Caroline Rookes is chief executive of the Money Advice Service