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Emma Simon: Is the Money Advice Service that bad?

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 

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. No it’s not –

    A lot of idiot IFAs who have £250,000 investable assets minimums slag it off.

    I paid £10.00 this year for it. Good value.

  2. Emma .. I know from reading your Telegraph column, and the many others like it, that, as a financial journalist, you will often be contacted by a reader who asks for help over something that has gone wrong, most likely they have suffered a loss of some kind, and want your help in holding someone responsible.

    Unless you believe that the MAS are unique on this planet in never getting anything wrong, and causing someone a loss of some kind, let’s assume for a second that someone is the Money Advice Service.

    First port of call might be to look at the MAS terms and conditions, the small print that so often plays a part in disputes of this kind.

    These are extracts from what you would currently find there:

    “Whilst we try to ensure the information contained on the website is accurate and up to date, we cannot be responsible for any inaccuracies in the information. We are under no responsibility to provide you with access to any additional information or to update this website, even if inaccuracies become apparent.”

    “We are not liable for any damages (including, for example, damages for loss of business or loss of profits) arising in contract, tort or otherwise from the use of or inability to use: the Money Advice Service website, associated publications, the advice given by our advisers via the Money Advice Line, face-to-face and/or web-chat sessions or any material contained in them, or from any action or decision taken as a result of using this website, associated publications, the Money Advice Line, face-to-face or web-chat sessions.”

    “By using or accessing any part of this website you will be deemed to have accepted these terms in full. If you do not accept these terms and conditions please do not continue to use this website.”

    If you found those type of conditions on a website for any other organisation – would you advise your readers to be entirely happy, nothing at all to be concerned about?

    Seriously, would you?

  3. “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”
    They could say the same about journalists emma and the logic you are using would be, let journalists pay for literacy lessons for those who are struggling to read & write.
    Would you be happy for an unelected, unaccountable quango to deduct money from your remuneration?

  4. Matt Worthington 9th August 2013 at 10:20 am

    “We are not liable for any damages…arising in contract, tort or otherwise from…the advice given by our advisers”.

    Surely this is something that must really rankle with you financial advisers? In that you’re deemed liable for pretty much everything, with no long-stop, but MAS advisers have a carte blanche?

    I’m expect MAS advice is pretty generic (good principles rather than specific recommendations), but I also volunteer as a money adviser (giving debt, budgeting & welfare benefits advice) and I am liable for any advice I give in that role, and the charities I work with have to hold appropriate insurance.

    Why is the MAS an exception? Will their staff never ever give bad or inappropriate advice? Ever?

  5. I know a MAS adviser who makes mint from referrals, it boosts his basic salary or £20K several times over.

  6. @ Exasperated Me 11.51. Do you know this for a fact? If you do why not whistleblow him somewhat sharpish. Lets see how good the FCA are at hunting down one of their own?

  7. Whilst I would answer NO toe ma’s question, Mike Fenwick (as always) has highlighted what irks many of us, i,.e an unaccaountabke regulator who pays silly money to it’s senior staff. Other than that, I agree with Richard Bishop, the total I pay is good value for money, but for the total budget, we could be getting better.

  8. Russell Hutchinson 12th August 2013 at 10:50 pm

    The MAS isn’t “that bad” it is merely unable to prove that it is doing any good with a lot of taxpayers money. When money is tight it is therefore worth asking – would that be better spent elsewhere?

    In the case of the MAS, the answer is almost certainly yes.

  9. I actually find it quite useful. Amongst others I use it to check savings and mortgage rates, print out and file the results as part of due diligence. I also use their calculators. I wonder how many other advisers use it this way? I’ll bet it adds to their number of hits which they (the MAS) fondly believe comes from ‘the man in the street’. As far as I’m concerned at least I’m getting some value for funding the ruddy thing.

  10. Agree Harry.
    If we are paying for it, we may as well make some use of it, but this will skew their hit figures. C’est la vie.

  11. @Harry, I use the annuity tabkesy all the time, I show consumers where to find it tell them what they can do themselves if they want. They never do and several weeks lager they come back and ask me to do it for a fee.

  12. Not bad at all. It doesnt provide regulated advice (i.e. a product recommendation) it gives generic advice to pay down debts, start a savings plan for emergencies and consider pensions and life insurance. The majority of people in the UK need that type of advice and who knows, once they are on track with some money in thier pockets they will come and see an adviser.

  13. @matthew
    yeah, right.

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