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Cicutti: How the Money Advice Service empire was built

Many years ago, back in the days when there were things called O levels, I remember one question we were asked in a history exam: “How long did it take to create the Roman Empire?”

I felt it was a daft question. Although a particular mode of society can develop gradually over an extensive period of time, empires themselves are not formed as part of a long-term process. They are declared overnight, or so I thought, generally by the person who wants to be emperor.

In fact, I was mistaken. Octavian, the heir of Julius Caesar, was granted the title of Augustus by the Roman senate in 27BC but his declaration of a successor, Tiberius, only took place in 14AD. In other words, the Roman Empire evolved into formal being over a period of several decades.

If you have managed to stay with me so far, then you have an idea of how I am starting to view the development of the Money Advice Service.

Once upon a time, a few months ago, I viewed the MAS as a Government-backed creation, vacuuming money off IFAs and the financial services industry to peddle a myth that it was offering millions of consumers something laughably called “advice”.

Back then, I thought the advice was partial, not of a very high calibre, missing out on key parts of most individuals’ financial journeys and focused on some aspects of financial products and the way they worked but not others.

I also criticised the MAS for the fact that it failed to focus on the needs of the less- well-off in society, especially those who had a need for debt counselling.
In fact, I should not have been so hasty. Under the MAS’s long-term strategy, the aim had always been to bring debt advice under its own remit.

As MAS chief executive Tony Hobman recently told Money Marketing, his organisation will actually operate two budgets – money advice, the bit I was slating, will receive £46.3m and another £40.5m will go towards debt advice.

Money for the former service will come from financial services firms while the debt part will be funded by banks, building societies and lenders.

Tony Hobman, whose remuneration package – including a pension entitlement and bonuses – tops £350,000, is responsible for the way this money is spent.

One or two financial advisers seem to feel this is rather a lot of money for the head of a government quango to be earning, especially as one or two of you have calculated that his wages cost each individual financial adviser about £10-£15 each.

In fairness, it should be pointed out that Hobman is responsible for a £95m budget and how it is spent. Except, of course, that he is not really.

A vast chunk of that money goes directly into the pockets of the increasingly controversial private business A4e, paid to provide a face-to-face money advice service to consumers.

In essence, what we have is a transfer of funds from financial advisers and the industry itself, who almost certainly levy consumers for this money, directly or indirectly, passing briefly through MAS and then into the capacious pockets of Emma Harrison’s former company, helping to pay her a nice little dividend of £8.6m last year.

Again, several points need to be made – the first is there is no suggestion all the money earned by A4E comes from providing money advice. The majority of that dosh comes from its efforts to find “work” for unemployed people.

Second, there is no suggestion of any fraud in relation to the money advice given. Third, I am not suggesting that the money advice being given is “wrong”. It does not appear to be – although I have read mystery testing which suggests it is facile and unlikely to be really effective in helping people to make sensible financial decisions.

Which is why I am not remotely surprised at the fact that while the MAS supposedly has a target to issue one million “action plans” for its online visitors next year, Hobman’s organisation is unable to “drill down” in the data to see what people are doing, if anything, to put those so-called plans into practice.

My personal guess is that none of them will be doing anything significantly different to what they would have done anyhow, even without the MAS’s intervention.

As for the debt advice side, all of us know there are a plethora of organisations providing what are in some cases excellent services to people with money problems. In the case of Scotland and Wales, the work will continue to be carried out, MAS funding, by Citizens’ Advice. In other parts of the UK, it will be A4e.

Regardless of who does it, Hobman, for the past 10 years a state-paid quango-crat, first at the Pensions Regulator and latterly at the MAS, will continue to pick up his £350k and counting as he passes Go.

How long does it take to build up a financial services empire? In Tony Hobman’s case, about 12 months.

Nic Cicutti can be contacted at


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. From A4E website
    “We’ve trialled new welfare to work concepts on behalf of DWP; financial inclusion test pilots for HM Treasury & FSA; and, cutting edge legal aid service reforms with the Legal Services Commission.
    We don’t wait for Government though to commission pilot programmes; we also advise them where, when & how they can improve value for money & service outcomes based upon our own experiences.
    For A4e, pilots matter. They are the public services of tomorrow.”

    So there we have it, A4E pilot everything they can think of, tender government for the contract and are usually awarded it.
    From what they say, public service of tomorrow will exist in a world where those running things will award themselves 8 or so million pounds in dividends, all paid for by siphoning off more and more from those who have no say in how much they are forced to pay.
    Nice little empire.

  2. And, as with all things linked to regulation by dictat, we have absolutely no choice in the matter.

  3. No say in the matter eh!

    Well you won’t have if you don’t get writing to your MP, the Chancellor, The Treasury Select Committee, the FSA itself, MAS and anyone who is prepared to read your complaint.

    I personally was not aware that A4E was engaged by MAS to provide anything. If we are going to be forced to pay for MAS out of our fees, we must have value for money and there must be some form of IFA services promotion for visitors, which directs them to our sector not put money in to the hands of those unable to do anything but waste it.

    Allowing this corrupted A4E organisation to benefit from our fees is downright ludicrous.

    Get off your butts guys and gals, get angry and sound off, that is the only way these idiots who run our industry will be called to account.

    Don’t let me be a lone voice in the wilderness raging against the storm !

    Just DO IT!

  4. I wonder how many other organisations are leeching off financial services making more money than many IFA,s will make dealing with the General public. Gaffer at MAS gets £350,000 plus expenses , then organises to pass the work out to a commercial organisations who then in turn make a bucket load. We very rarely see these opportunities advertised. It must be down to the Friday night dinner recruiting club

  5. @ Ned
    Ned, MP’s, the Chancellor and The TSC have no power over the Independent, unaccountable, unelected quango that is the FSA. Not unless they pass an act of Parliament which reverses this situation.
    The FSA set up MAS and MAS is hardly likely to vote itself out of a job.
    Welcome to UK PLC, where Government has allowed any power it had to be passed to all of these unelected quangos. This enables government to say “It is not our fault” when it all goes belly up. It also allows the unelected, unaccountable quango to say “We accept no responsibility”
    Meanwhile, we the ones forced to pay for all of this,
    have no say and no representation in all of this.

  6. The only debt advice provided by A4e that I was aware of was that they run the debt advice telephone helpline in Northern Ireland
    see I’m not sure if they provide any face to face debt advice in the rest of the UK.

  7. @ Nick
    This is from the A4E site
    “A4e is delivering face-to-face money advice sessions in England and Northern Ireland on behalf of the Money Advice Service, an independent organisation providing free, unbiased money advice for everyone in the UK.

    Our trained Money Advisers can cover everything from budgeting to saving, credit and borrowing, mortgages, insurance, pensions and retirement planning.

    About the Service

    The Money Advice Service is here to help everyone understand and manage their money better, providing clear, unbiased money advice to help people make informed choices.

    It believe that the right money advice can make a difference to people’s lives. And when people take steps to manage their money better, people can live better too.

    The Service is independent. It was set up by government and is paid for by a compulsory levy on the financial services industry. It is completely independent of both.

    Advice and information is available face to face, online or over the phone.

    How we can help

    If you are part of an organisation, then your staff and customers could benefit from free, impartial, face-to-face money advice sessions.

    We can deliver sessions from as often as half a day per week up to 5 days per week, in almost any location, dependent on the needs of you and your customers.

    Booking a session

    If you are a member of an organisation based in England or Northern Ireland, and would like to offer the service to your customers or staff, please contact Steve Hughes at or call … ” .

  8. I found out there was a number for MAS in Welsh for some financial services siarad Cymraeg so I called it, nobody there. I then called the English number, again nobody there so I made a complaint to MAS and Martin Wheatley.

    I then had a jumped up CAB lady on the phone telling me she had to go to the doctor and that is why there was nobody to answer the phone, she is the only one there and she is bilingual. She had no idea who pays for MAS. The bloke giving the advice is a former Barclays adviser who probably has some ‘mates’, I feel some mystery shopping coming on.

    Is this what you lot are paying for?

    I hear this MAS thingy is as about as effective at raising consumer awareness as temazepam.

  9. This is better Nic. Now someone who has some organisational ability and clout needs to galvanise support so that someone/body like Parliament can see if this is just the waste of money that it looks like.

  10. To clarify some of the points made in Nic’s article:

    A small minority of the Service’s budget goes to A4e, paid only against results, and none for debt advice services

    The Service can drill down into data which shows, for example, that amongst those who recalled completing the health check three months later, 70% of people said it had impacted their approach to their finances

    IFAs’ levy for the Service is vastly outweighed by income from other stakeholders (16%)

  11. First, let me say that I congratulate the MAS press office’s willingness to engage in debate on this forum. It is a healthy sign of openness and should be strongly supported by all fair-minded IFAs

    In response to the Press Office statement above, however, contrary to the claims that 70% of those “who remembered” carrying out the health check saying it had impacted their finances, Money Marketing has just “deconstructed” this story.

    It found that of the 1,000 people tested, 300 could not even remember doing the survey, so how anyone could possibly claim the behaviour of that 30% of people polled was in any way “impacted” beats me.

    In total, only about a third had actually made any changes to their financial behaviour. And even then, we have no indication whatsoever of what those changes were or of their positive financial value.

    Until we do, I’m afraid the jury remains out on the effectiveness of the MAS health checks – and of the vast amounts of money being spent to encourage people to take them, money which I fear is being wasted.

    Back to the drawing board…

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