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.