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Consumer panel warns of ‘real risk’ to consumers from MAS closure

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The Financial Services Consumer Panel has called the Government’s consultation on public financial guidance “sketchy” and says the abolition of the Money Advice Service would leave consumers without a source of impartial financial guidance.

The Treasury consultation closed on 8 June. Launched after the March Budget, it outlined plans to close the Money Advice Service with its pension guidance remit going to a new provider as well as setting up a second body with responsibility for money guidance.

In its consultation response, the FSCP says getting rid of the MAS brand will lead to “consumer detriment”.

It explains that most users of the MAS website find the page through Google which is a result of “years of search engine optimisation” rather than paid-for searches.

The FSCP says more than 8.4 million people contacted MAS in 2014/2015, which was nearly double compared to the previous year.

Its response to the consultation adds: “This will be lost when the MAS brand is switched off and we are concerned that consumers – who will still search for their answers in the same way – will be unable to find an independent source of guidance.”

The FSCP is also concerned some of the gaps in money guidance will be hard to fill because of a lack of independent and non-commercial organisations providing guidance on issues such as borrowing, mortgages, protection insurance and budgeting.

The consultation response says: “MAS is a trusted brand because the Government set it up. Providers need to be equally trusted. We have no objections to a commissioning model, but it would be helpful to know where the government thinks the providers will come from, and how their impartiality will be assured.”

FSCP chair Sue Lewis says: “The Government appears to expect the MAS successor body to take responsibility for improving financial capability, but without saying where leadership for the UK strategy should lie, or what the governance arrangements should be.”

She adds: “There are real risks for consumers in these proposals and we hope the Government will consider the evidence carefully, including experience from overseas, before taking hasty and damaging action.”

Apfa published its response to the consultation yesterday calling for clarification on how the new pension guidance body would be funded.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Ah, the advocates of the something for nothing brigade are at it again. For the vast majority, if they want advice (legal, accountancy, financial or anything else) they know full well that they will have to pay for it.

    I haven’t noticed that accountants or solicitors having to stump up so that the public can go and get freebies.

    Anyway if you really want to help the consumer, how about starting with education? Far too many adults have the numeracy skills of an eleven year old and when you consider that we have the worst rate of child literacy and numeracy in the developed world, even that level doesn’t account for much.

  2. The consultation response says: “MAS is a trusted brand because the Government set it up.”

    And there’s me thinking it was set up by the FSA/FCA, which we keep getting told is independent of Government, and funded by an industry that had no choice in the matter.

  3. Rename it as advice is misleading. Fund it from tax payers money not the industry. Not possible, why? If you want to give something for nothing to consumers you pay for it. As Harry stated accountants and solicitors don’t have to pay such an unfair levy. Why should my fee paying clients have to pay towards MAS?

    Now if the money was spent on education of the public about scams, the difference between regulated, unregulated, execution only, how the FOS and FSCS worked and when they are not protected, then I would pay happily.

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