The Investment Management Association says the FSA needs to improve its governance of the Money Advice Service and that financial services firms should be involved in holding it to account because they provide its funding.
The IMA’s response to the Treasury select sub-committee’s inquiry into the service says the regulator’s “weak” governance to date could be down to its considerable work load but that it must be improved.
It says: “We urge all involved to be more vigilant going forward, in particular the Financial Conduct Authority, as it takes over from the FSA. This will give industry, a supposed beneficiary of the strategy in the long run, more confidence their contributions are being well spent.”
“MAS should be accountable, not just to Government, but to all its funders, including IMA member companies.”
It says: “The budget looks large, indeed too large to many businesses in the industry. Lack of transparency, until recently, has led to scepticism about MAS’s ability to manage it effectively. For the IMA, quarterly meetings of the industry forum, chaired by MAS non executive director Laurie Edmans, have helped rectify this problem.”
The submission says the MAS must be careful not to be seen as a “one-stop shop” for all personal finance information, but a hub that signposts consumers to further information provided by experts.
Victoria Nye, IMA director of training and sducation says: “MAS provides a valuable service. We would like to see as many UK consumers benefiting from it as possible. MAS cannot not rely on consumers taking the initiative, it should work with partners to encourage people to be more proactive and to seek financial advice. And the critical foundation to this encouragement has to be financial education in schools.”
Money Marketing revealed the Treasury select sub-sommittee’s plans for an inquiry into the service in May.