View more on these topics

Cicutti: MAS will be a threat to IFAs

One of the problems for anyone who reads newspaper reports is that you can never be sure if you are getting the whole story – even in a highly-respected paper such as Money Marketing.

After all, a paper is trying to encapsulate in perhaps 200 words what is often a complex set of issues and nuanced meanings.

What appears in that story is determined not only by the angle taken by the journalist but also how he or she quotes the various subjects who “drive” the report.

I have to say all this as a preamble, you understand, because if I didn’t, I would find myself astonished by the bizarre comments from Money Advice Service chairman Gerard Lemos, reported in Money Marketing last week.

Forgive me for returning to the subject of the MAS so soon after writing about it last month but the issue, as many IFAs are themselves telling me, is vitally important.

MM reporter Tom Selby wrote that Lemos told the ABI annual conference the target market the MAS is trying to reach is totally different to the one IFAs currently deal with.

Lemos was quoted as saying: “About half the UK population would benefit from free advice and that is the advice gap we are aiming to fill. It seems to me inconceivable that independent financial advisers can reach that market after the retail distribution review.”

It occurs to me that slightly more than half the UK population would actually “benefit from free advice” – like, say, all of it. After all, it hardly matters whether you are a millionaire or a dustman, you are hardly going to look at a gift horse in the mouth.

Yet it is not that kind of silly comment that gets to me, ridiculous as it is. It is the liberties Lemos takes with his interpretation of the statistics in terms of who IFAs and the MAS are attempting to reach.

The reality, and Lemos knows it, is that neither IFAs nor the MAS are able – or interested, for that matter – in educating and relating to a vast chunk of the UK population.

Who is being completely ignored? Millions of households of people earning barely above the minimum wage or on the dole, living in sink estates, whose incomes just about allow them to survive on a day-by-day basis, that’s who.

The MAS is patently uninterested in reaching out to them. If it were, it would have devoted vast areas of its website to debt counselling and the best ways to bear down on rip-off lenders. In fact, relative to the space it devotes to other issues, there is almost nothing regarding these issues on its website, clearly indicating its priorities are at the “higher” end of the UK population.

Take away from the remaining number the millions of pensioners who might have been relatively affluent and active savers once but are now simply trying to eke out a living on their small pensions and you are left with barely half a total UK population that both IFAs and the MAS could potentially target.

Allow for a huge overlap between many well-off consumers who end up believing the MAS gibberish about “free advice” and it is clear that IFAs will find themselves having to defend their work against people who believe the generic and sub-standard material they read on the MAS website is all they need to engage in intelligent financial planning.

You don’t believe me? For many years., I was involved in setting up a financial website, which we aimed at well-off consumers. Yet the language and approach we used led the boss of another highly successful website to visit my chief executive and, in his words, ask us to “get our tanks off his lawn”.

In other words, the market for web-based financial information is smaller and more heterogeneous than Lemos would have us believe.

Even if we accept that the overlap between IFAs and the MAS is nowhere near as great as I have suggested and their audiences are completely distinct, that begs another major question regarding the quality of the advice the MAS provides.

There is nothing there about how to base investment or pension decisions in a sensible manner other than a half-hearted look at charges. Nothing about risk and how to reduce it, about investing for the long term, about the differences between various asset classes and so on, all information that is vital if we want consumers to avoid some of the worst financial traps that millions have fallen into over the years.

In effect, what Lemos appears to be saying is that, assuming there is as much of a difference between his website’s efforts and the work of IFAs, which I dispute, then the MAS offers free advice to help those who would otherwise not be able to get any. If so, this so-called advice will be rubbish.

As I said, I have to believe Lemos was saying other far more intelligent things at the ABI conference than Money Marketing managed to fit into its 180-word report. Because if that were not the case, the MAS’s response to his critics really would be crass and pathetic.

Nic Cicutti can be contacted at


News and expert analysis straight to your inbox

Sign up


There are 30 comments at the moment, we would love to hear your opinion too.

  1. When is advice not advice?

    The Money Advice Service does not provide advice (see section 3.5.1 of its T&Cs) What it provides is information and guidance. Unfortunately it feels the need to call what it does “advice” because it believes that the public will not engage with it at all if it was called the Money Information Service.

    I don’t think it is a threat to the IFA community at all. However, I object to having to fund it because I can spend the £1,200 it just cost me on much more targeted marketing that will reach the kind of people who might then engage with an IFA. I am afraid that I simply don’t accept that the MAS is going to cause users to beat a path to my particular door. I know this is sounding selfish but I and my firm pay enough taxes already we simply don’t need to pay more to provide a social service that I don’t believe is really going to work. There is nothing available on MAS this is not already available on thousands of other websites for free

  2. Steven Farrall (Adviser Alliance) 7th July 2011 at 10:46 am

    I am sure Cicutti is right, but the agenda needs analysing.

    Firstly it can be stated without doubt that the purpose of the FSMA2000 was to create reg-yew-lay-shun that acted as proto nationalisation of the financial system – a long held ambition of all lefties/bureaucrats. Needless to say it failed in the biggest bank busts in history, but by the twisted mindset of these clowns the answer is more nationalisation. Hence the MAS. It is to fill the gap created by the deliberate destruction of the IFA sector (as it has been developed by freedom and markets) by the FSA. We are the last un-nationalised bit of FS, and as IFA’s are by nature independent people they are not voluntarily nationalisable – it would be like trying to herd cats – it is easist to destroy us and replace us with the MAS.

    It’s a power grab by the unelected unaccounatble functionaries in the FSA.

  3. Money Advice Service is a load of old rubbish….

  4. To me the MAS is a bit like the dinosaur advisers who used to claim the advice they gave was “free to you as the insurance company pays me”.

    I agree with Martin entirely and free advice is usually very expensive!

  5. The MAS reminds me off the old dinosaur advisers that used to say their advice was free but wasn’t obviously.

    I agree entirely with Martin and free advice usually turns out be very expensive!

  6. I agree with both Nick’s. I would go further and say that we should be allowed an “opt out” to the MAS part of teh FSA levy if we pay the equivalent amount to an acceptable alternative financial education system. For IFAs that could become IFA Promotions for instance.
    This is an unelected quango, taking OUR money which we have to obtain from OUR clients who seek TRUE IMPARTIAL INDEPENDANT ADVICE and tehn spend it on INFORMATION and GUIDANCE to those not willing (or able I accept) to pay for true advice.

    Advisory firms should be allowed to opt out, but providers should NOT as their services will be purchased by both non advised and advised distribution methods.

    What was the RDR supposed to be about if the MAS issue of who funds it is not taken in to account?

    MAS is a good idea, poorly implemented, with misleading titles and paid for by the WRONG people.

    Perhaps this is the point we all need to make, by paying our FSA, FOS and FSCS fees, but refusing to pay the MAS levy OR making the cheque payable to IFA Promotions and sending it to the FSA so they have to return it and ask for it to be made to the right payee.

  7. The MAS fails by the FSAs own standards of intergrity – it calls itself an ADVICE service, but it is a guidance service which gives very biased “guidance” so providers will be trying to get to the top of its “league tables” – which are misleading as they represent only a small part of what an IFA would consider.
    If IFAs tried the “cheapest is best” approach they would be shot, but this is the approach millions will take on the basis of MAS “advice.”
    I wonder if FOS will have anything to say?

  8. Free advice? It is neither free or advice.

    Is this really what the FSA was created for? The budget for this unwieldly beast, which is located in No. 1 Canada Square, one of the most expensive office locations in London, is huge. Much of it spent on costly ‘consultants’.

    I agree with the previous commentator that if the regulator wanted to include all income groups then spend the money on Citizens Advice Bureau who actually do a good job in the community.

  9. I personally can’t understand why they have spent the millions that they have on the rebranding of the money made clear site.

    There are a few additional sections but all in all its the same information but with new purple rainbows everywhere. I’m really pleased to pay for all that jazz!

    I do think, however, that the financial plan will be a great bonus for IFAs. I put the information in for myself last night and the plan that came off was 40 pages long. Most of this was basic stuff like checking what you already have to make sure that it’s competitive and I already do it.

    On the front page it confirms that this is guidence and not advice and that they should contact a professional financial adviser if they need advice – THIS IS CLEARLY WRITTEN ON THE FRONT OF A 40 PAGE DOCUMENT NOT AT THE BACK.

    If nothing else it will explain that my invoice will allow me to take the 40 page plan off them, make it into coherent advice and at the same time provide them with the advice that the need on the products to fulfill the 40 pages of points that they need to do something about.

    The slight irony is that Mr Sants has just confirmed that clients don’t actually read the information produced so they’ve created a new system which produces 40 pages which they won’t read!

    I do think that it should be money guidence service and not money advice service.

    My fear is for the ones who are unrelalistic and think that they do it all right (I don’t really want those people as clients anyway) or worse still those who see the 40 pages, assume that it’s rocket science and continue to do nothing with their money – this site won’t solve either of those two.

  10. I and my firm provide independent guidance via our local Citizens Advice Bureau on a bro-bono basis.

    This is focussed and face to face but does not constiture reguated advice however it is provided by well qualified, professional planners. The people seeking guidance have a clear path set out as to how they should proceed.

    We commit to about 2 hours per week on average which say at £150 per hour charging time over 46 weeks a year, equates to about £13,800 per annum.

    Why should we also pay the MAS levy, the cost of which has to be passed on to our clients who have chosen to pay for professional advice?

    Is that ‘treating customers fairly?’

  11. Just been looking at MAS . . . the cheapest balanced managed ISA (didn’t think the FSA liked the phrase, but they use it) is the L&G (N) Balanced fund available through a direct adviser at Nationwide. Given the figures stated it is because there is no initial charge factored into this.

    Looking at fund sites, trustnet has the same fund with no initial charge and morningstar shows a 5% initial charge. So which is correct ? There is no reference on the relevant pages as to who provides the data.

    This leads me to doubt the integrity of the data, and this is within the first 10 minutes of looking at the site.

    Anyone other company did this, it would be fined.

  12. The way around this is easy.

    Just start several businesses (not authorised or regulated by the FSA) called Money Guidance & Advice….

    Giving factual information is not a crime. A referral can then be made to a a qualified adviser to do the transactions.

    This is a possible solution for those advisers who will not be up to diploma level by 2013.

  13. Another Pissed Off IFA 7th July 2011 at 12:07 pm

    Remember the Apollo 13 movie?

    Gene Kranz discovers what a botch-up was made when they put air scrubbers of different design on the same spacecraft. He says, “Tell me this isn’t a government-run operation.”

    Everyone knows that government screws-up big time and they do it with OUR MONEY.

    The FSA/MAS have and will do this. But these guys have the audacity to actually believe they are doing good. That they somehow are above the fray, that they and only they, can deliver truth and honesty.

    What a load of boloney.

    If there are people involved they WILL screw-up.

  14. @Duncan Carter – I think what you do at the CAB is EXCELLENT and in my example of being able to “opt out” of the MAS levy, there should eb a range of options including paying IFA Promotions instead, paying CAB or as you do, provide your time pro-bono.
    This is the argument we should be having with the FSA and Government, not that the education of teh consumer on financial matters is wrong, but that it should be across the board UNLESS it is funded by taxes. If it is by levy’s we should be able to choose what education is given, what format and whether it meets our social and ethical beliefs.
    It’s currently a bit like expecting a pro choice believer to pay a levy towards an anti abortion charity. It should be a matter of choice when their are conflicting views OR it should be ELECTED government controlled and not quango controlled.
    This is all undemocratic and is the sort of actions which ended up in the American War of Independance i.e. taxing without representation, which is what is being done to IFAs.

  15. Paul (Ned) Naylor - IFA 7th July 2011 at 12:26 pm

    Hi Nic
    At lastyYou are waking up and the scales have dropped from your eyes.

    The MAS is just another method of depleting the influence of iFAs in the overall retail investment market.

    Trouble is, the consumers believe all that garbage put forward on the website, “our advice is unbiased and independent” is a total no brainer.

    When the media wakes up to what the FSA is
    doing and investigates it properly (just as the phone hacking scandal is now coming to light) they need to put the consumer right as to what is going to happen, the FSA is not taking any steps to inform the consumer of how IFA services are to be paid for post 2012 and this service is totally misrepresentative, I have lodged a complaint via FSA and MAS websites as to the misleading content of the site.
    Anyone guess what the response is?
    NIL! No comment, no justification no apology.

  16. Another Pissed Off IFA 7th July 2011 at 1:03 pm

    When Joe Public wakes up to the additional 20% VAT added to the cost of financial services and the other little ways the FSA have discovered to get more of his money into their pockets there will be some interesting questions asked.

    Honestly, if someone were to deliberately set out to manufacture the most costly and confusing proposition to put before the PBC (Poor Bloody Consumer), it could not compete with the monster that is RDR.

    Shame on the FSA. Shame.

  17. So who will ‘carry the can’ when a disaffected consumer follows the guidance offered by MAS and loses his life savings ?

    Indeed, to whom will that consumer complain ?

  18. Re VAT on advice post 2013, there has been some very useful input from Gill Cardy (ex member of the FSAs Small Practitioenrs Panel) and some VAT specialist on another website.

  19. Neil F Liversidge 7th July 2011 at 2:09 pm

    Yeah, right, like Vespa is a threat to Harley-Davidson.

    I still object to paying for it though.

  20. What’s the betting when people lose money after following MAS ‘advice’ it will suddenly change from a government iniative to one funded by the industry?

  21. Another Pissed Off IFA 7th July 2011 at 5:15 pm

    One wonders what the ASA would make of a company that holds itself out as offering ‘advice’ but which in its T&C suddenly claims it to be only ‘guidance’.

    Sounds like classic double talk to me.

  22. Terence Martin 7th July 2011 at 7:23 pm

    Any service worth having doesn’t come free — as intelligent and affluent people know and accept. That’s why I’ve written a guide which is aimed precisely at those individuals who could benefit from taking personal financial advice, but for whatever reason choose not to. The guide explains why expert, one-to-one financial advice cannot be provided free of charge and never will be provided free of charge. Please e-mail me ( if you’d like a copy.

  23. What’s everyone getting their knickers in a twist about?

    This is just the latest branding of the Money Made Clear service.

    As many have said it’s not aimed at most IFA’s target client base, it does impart sensible and clear guidance most of the time etc.

    The only issued I have are that

    1) Is it really necessary to change the brand name every other week and spend loads in the process. Come on FSA get you act together.

    2) The adverts should be changed. It is NOT FREE advice. I’ve just had my FSA bill for the year and there is a separate entry charge for MAS.

    If I pay for something I would at least like some credit, as I suspect would the rest of the FSA Fee paying industry!

    If I pay for something I would at least like some credit, as I suspect would the rest of the FSA Fee paying industry!

  24. How much does it cost Terence?

  25. It’s difficult not to see pretty much all of the above posts as self-interested. If you DID care about the sizeable chunk of the population living on the breadline on sink estates, you’d do something useful in your spare time and earn some respect in the process – let me point you to and for starters.

  26. Grosvenor Chaundy 8th July 2011 at 9:49 am


    Have you been hacking my phone??

  27. What happens when the MAS ‘client’ takes a course of action based upon the incorrect content of the website or a leaflet and the ‘client’ suffers a loss? Who pays the compensation? If there isn’t any compensation to be had why is this so? Don’t think the MAS has got it wrong yet? Take another look.

  28. Julian Stevens 8th July 2011 at 1:22 pm

    So where’s the Cost:Benefit Analysis on the basis of which the FSA decided to launch (and start charging us for) the MAS? I don’t think they bothered with one, even though constitutionally, that’s exactly what they’re supposed to do. Was the industry (which, let us not forget, is what’s being forced to pay for the MAS) consulted?

    Will a Cost:Benefit Analysis be undertaken after the “service” has been running for a year, so we can see whether or not it’s actually delivering any tangible benefits in return for the money we’re having to pay for it?

    Will any data be published showing just what sort of people have been using the MAS and the nature of their enquiries, so we can all see and debate whether or not their needs might have been just as well served by the CAB and various existing debt-counselling agencies?

    Will the FSA ever be accountable for ANYTHING at all or is the MAS just another idea that sounds good, so let’s throw a few tens of millions of pounds of industry money at it, create a few score well-paid jobs and see what happens?

    It all stinks. And the biggest lie of all is that the FSA is “an open and transparent regulator”.

  29. Terence Martin 8th July 2011 at 2:33 pm

    Jonny C

    You can look Jonny but you can’t touch…

  30. The sad thing is that the FSA, in setting up the MAS, has the arrogance to believe not only that it is going to do some good, but also that they as regulators are qualified to give the ‘advice’ contained in the web site. With their track record they are taking the public for fools.

    Unfortunately they do not understand that the main message the public will now take from the advertising is that advice does not have to be paid for.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm