View more on these topics

Nic Cicutti: We’re running out of chances to get guidance right

Nic Cicutti

How should the UK public be supported to make wiser financial decisions and to be helped out of the mire if monetary disaster strikes?

Last week, the Government told us its plans: it will create a new body out of the ashes of the Money Advice Service, The Pensions Advisory Service and Pension Wise.

According to ministers, the new entity will become a single point of reference for anyone seeking not just pensions guidance, but also money “advice” and information more generally. If people need additional help from other organisations, for example debt charities, the service will point them in that direction.

Pensions minister Richard Harrington was quoted as saying: “A single guidance body will be more efficient and will help consumers make the right financial decisions, and we are committed to ensuring people can access the best free and impartial financial guidance possible.”

His comments followed former chancellor George Osborne’s announcement in March, sounding the death knell for MAS – although, it has to be said, its death throes seem to be taking longer than many of us thought they would.

Osborne’s original statement envisaged two organisations in place, one focusing on pensions, as Pension Wise and TPAS currently carry out, the other looking at wider issues such as money and debt, as MAS was first set up to do.

My own view, expressed at the time of the then chancellor’s Budget speech, was there is a need for a single organisation to take on the new role, combining every area of financial “guidance”, “support” and “advice”.

At the end of the day, it is clearly impossible to separate pensions from other money issues. Young people starting out in life need to have a greater understanding about potential retirement decisions they make, while older people’s concerns about their pensions are linked inextricably to how to manage their finances with the finite resources they have.

That is why, I am glad that, following consultations with the financial services industry, as well as other interested parties to determine what the new organisation should look like, the Government has chosen to go down this route.

“There is a need for a single organisation to take on the new role, combining every area of financial ‘guidance’, ‘support’ and ‘advice’.”

Treasury economic secretary Simon Kirby was quoted as saying: “We strongly believe creating one public guidance body is the best way of making it as easy as possible for people to access the help they need to get their financial questions answered.”

A lack of direction

What is still completely unclear is what form this organisation will take and what its actual mandate will be. Despite six months of discussions between the Treasury and the Department for Work and Pensions, which funds TPAS, no model was outlined in the two departments’ statements in terms of what the new financial guidance body will look like, what its relationship will be with regulators like the FCA and how it will ultimately be funded.

Both TPAS and Pension Wise receive financial support from the Government, a large chunk of it from the DWP. Yet Osborne’s original statement in March was that, as the Treasury subsequently explained, its replacement would be a “smaller” advice body.

My concern would be if the Government tries to seize the opportunity offered by merging the different forms of financial guidance and support in order to reduce its own contribution to the combined body.

What did for MAS was not so much the amount of money allocated to it as a result of the industry levy but the way so much of it was wasted on bloated salaries, ludicrously exaggerated claims about its effectiveness and ridiculous marketing campaigns.

Ironically, one of the generally unreported elements of former FSA consumer director Christine Farnish’s review of MAS in March 2015 was its finding that even after spending £100m marketing itself, the service’s unprompted brand recognition stood at between 5 and 10 per cent.

If anything, there needs to be more money spent in ensuring people make wiser financial decisions about their money. The issue is not so much about how much money but making sure it is being used effectively.

In that regard, one of the few positives of the MAS is the fact it was prepared to fund organisations – like Citizens’ Advice – to deliver face-to-face debt advice.

Equally significant was the way it has belatedly worked jointly with other commercial providers, for example energy and water suppliers, to agree joint additional millions of funding for debt advice organisations.

This model of working with other organisations needs to be increased exponentially by the new body, both as a means of raising additional funds but more importantly to leverage their expertise in areas where there is a clear need for additional input.

For example, taking notice of the fact that financial education is now part of the national curriculum and providing support to voluntary organisations helping deliver that education directly in classrooms, something the MAS has no knowledge of but the Personal Finance Education Group has. Or entering workplaces to give guidance on retirement planning, something TPAS excels at.

It may take time for the all the discussions to be concluded and for a good model to be created and funding agreed. But it is vital to do it properly the second time round. I very much doubt there will be a third chance to get it right.

Nic Cicutti can be contacted at



Govt to create single guidance body

The Government has decided to create a single organisation to deliver guidance on pensions, money and debt advice. The new public body will replace the Money Advice Service, The Pensions Advice Service and Pension Wise. The Government first proposed guidance should be delivered by two organisations: a streamlined MAS and a new pensions guidance body. […]


Apfa: Govt must clarify funding of new pensions guidance body

The funding of the new pensions guidance body should not fall solely on FCA-regulated firms, Apfa has urged the Government. The Treasury’s consultation on public financial guidance closes today. Launched after the March Budget, the consultation outlined plans to close the Money Advice Service with its pension guidance remit going to a new provider as […]


MAS to return fees after budget surplus

The Money Advice Service is to return £800,000 to levy payers after it reported a surplus income in the 12 months to 31 March 2016. According to its most recent annual report, the MAS reported surplus income over expenditure of £300,000 in the year ended 31 March 2016 compared to deficit income over expenditure of £800,000 […]

Dividend slump? Not if you look globally

By George Boyd-Bowman, Manager of the Neptune Global Income Fund Recent research has indicated that global dividend growth will slump by as much as 50 per cent in 2016. As collapsing commodities hit high-profile dividend payers, George Boyd-Bowman explains why the US and Japan are his top picks for income growth in 2016. Click here […]

Parental leave and pensions

Fiona Hanrahan  – Senior Product Insight and Technical Support Analyst We are often asked how parental leave impacts workplace pension schemes in terms of funding in general, auto enrolment and salary exchange. This article will explain each of these. How does parental leave impact the funding of workplace pension schemes? A member of a defined […]


News and expert analysis straight to your inbox

Sign up


There are 8 comments at the moment, we would love to hear your opinion too.

  1. This annoys me ! Are we getting too used to living in a nanny state ? – there are thousands and thousands and thousands of highly qualified advisers out there that give advice , guidance call it what you wish , on all aspects of finance. We do not need another body which we all pay levys to being run by people drawing incomes of 3x what the PM earns.
    Why are pensions so special , why is there no body to guide us on mortgages , TV Buying, Car purchase , debt purchase , home improvemet guidance ect ect ect – sorry but the situation has become ridiculous and the public need to be more responsible for their own destinies.

  2. Excellent news it’s a public body and the Teasury are going to pay for it about time too!!

    • Sad to say Nick the treasury doesn’t fund anything as it has no money of it’s own. It is funded from everyone’s taxation. The only question is how effectively the taxpayer’s money is spent and on current form (MAS, Overseas Aid etc.) spending by government in this (And many other) area(s) has been ineffectual.

  3. Treasury not Teasury! 1 finger typing on an iPhone!!!

  4. When all is said and done, guidance can only be a first step along the road to taking regulated advice. Knowing what may be your most suitable course of action is one thing. Actually getting it done is rather another.

  5. I really couldn’t care less. If they get guidance right it is not likely to affect an advisers business. If they get it wrong it not likely to affect an advisers business. The main reason being that the vast majority of those who seek guidance are unlikely to be the type of people who will properly engage with and pay professional advisers anyway. The only thing I care about is how much it is going to cost me and I don’t see that reducing anytime.

  6. Trevor Harrington 13th October 2016 at 6:28 pm

    There is a concept here which Nic (Cicutti) seems to be stuck with.

    If we extend his concept to it’s natural conclusion, then everybody will have access to advice on all buying and selling situations, essentially every situation where the public spend money, be that financial advice or buying a new kitchen, and in that process, the advice will be advised uniformly, without variation, will always be correct, will be funded by some sort of levy, and nobody will ever make a mistake, be that the buyer, or indeed the adviser.

    Such socialist drivel is really not worth reading or arguing over.

    We are at a point of the development of the species, where advice will always be good, bad, or indifferent, and no amount of legislation or regulation, or creation of publicly funded bodies, will completely eliminate the bad part.

    The issue is how to reduce the bad part and enhance the likelihood of the public receiving the good part in most cases, or the indifferent part in the rest of cases.

    In that sense, our regulation screams failure and contempt, after many years of completely and utterly failing to listen to those who know the answers (the Advisers at the front of the sales/advice process themselves), whilst preferring to listen to the pseudo superior drivel spouted from failed journalists, who have no qualification, no experience, and no professional standing in the profession which they presume to be an accurate or accredited commentator.

    The dream of uniform and unfailingly accurate mono standard professional advice, funded for through the state or a public body, is a socialist dream which we really should not be debating in this day and age.

  7. “it’s natural conclusion” should be “its” natural conclusion. There’s no apostrophe in ours, yours, hers or theirs so why, in this context, should there be in its?

Leave a comment