I realise this is controversial but is the Money Advice Service really that bad? Taking a cursory look at its website last week, I was struck by its clarity and ease of use.
The site was peppered with useful signposts explaining where consumers could obtain more information. These included embedded links to a state pension forecast, telephone numbers for free debt counselling and websites that enable users to find a local solicitor, accountant or financial adviser if they want more specialist advice.
The MAS site seemed to be wholly supportive of the IFA sector. I suspect that what rankles with many advisers is that they have to pay for it. As many have pointed out, if they were handed £78m a year from the public purse, they could launch a similar service and throw in a personalised hour-long fact-find and a free cup of tea for each customer contact.
Clearly this service could cost less than £78m a year. Citizens Advice, for example, raised just £62m in income in 2011/12 and provides practical support and tailored advice, compared with the generic information supplied by the MAS. It is also easy to throw brickbats at the MAS’s customer service targets, which do not include qualitative research on how many people cut their debts, stick to budgets or were better off in the long run as a result of visiting this site.
But both seem side issues to the central point: should there be a free online money hub like the MAS website and how should it be funded?
The MAS has the potential to be a valuable service. Yes, there is information about budgeting, borrowing and benefits elsewhere on the internet but the MAS is a useful centralised starting point. One would hope that, run properly, it could relieve some of the pressure on organisations like the CAB. But who should pay for it? The CAB, although a charity, is largely funded through Government and local authority grants.
There is an argument that the MAS could be funded on a similar basis. But it seems fair for hard-pressed taxpayers to ask for a contribution from the financial services industry, which despite the recent crisis still turns over a healthy profit. After all, the consumers targeted by the MAS – those under 35, earning less than £35,000 a year or working fewer than 35 hours a week – are no longer well served by banks or insurers, which have largely abandoned these demographic groups.
Rather than impose a general levy of every financial firm, there is a strong case to change the way money is raised from the industry. After all, Treasury coffers are already swollen by FCA-levied fines, which since the start of 2013 easily top £78m.
Consumers might argue they have been ill-served by many financial firms in recent years so let these firms pay for better and clearer information for all.
Emma Simon is a freelance journalist