View more on these topics

Mark Hoban’s letter of dismay over Money Advice Service cuts

Treasury financial secretary Mark Hoban has written to the Money Advice Service over concerns it may drop its work on financial education for young people, Money Marketing understands.

Last week, Money Marketing revealed MAS was making swingeing cuts to staff numbers. It is understood over three-quarters of the 150 staff have been put on consultation, including its team focusing on young people. This follows a review of its products, services and delivery channels.

In July, Hoban gave MAS the task to review provision of financial education in schools and for young people. Money Marketing understands Hoban has written to MAS to voice his concern that this work will be scrapped.

An MAS spokeswoman refuses to comment on the letter, but says: “We intend to undertake a research project to consolidate our understanding of all the existing evidence covering the impact of educational practice and to map the wide range of initiatives that are funded by the financial services industry.”

It is understood all MAS roles other than senior management and central operational jobs could be scrapped. A source close to the organisation says MAS plans to recruit 50 new staff with social media and digital skills next year to focus on the website and scrap its phone and face-to-face service. The spokeswoman denies these services will be cut.

MAS was launched in April and is funded by a statutory industry levy. It has a budget of £43.7m for 2011/12, which includes £13.5m for staff costs. It has spent over £2m on delivery of its online healthcheck and £4m on an ad campaign.

Yellowtail Financial Planning managing director Dennis Hall says: “MAS would have a greater mass-market appeal online and cost the industry less to fund.”

An e-petition, started by Moneysavingexpert.com founder Martin Lewis, calling for financial education to be compulsory in schools has reached 100,000 signatures which could trigger a Parliamentary debate. The All Party Parliamentary Group on financial education for young people has 225 MP members.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 30 comments at the moment, we would love to hear your opinion too.

  1. Unfortunately Mr Hoban, when you ruin the businesses of the people who fund you with your stupid regulatory schemes you run out of money to fund your vanity projects.

    Maybe the new MAS services that you desire so much could be funded by a levy on the salaries of MP’s?

  2. It is interesting that there were once 5 key objectives which the FSA stood for of which one was to “promote financial education to the general public”. This objectives was dropped some time ago.
    Now it would appear MAS are going to do the same so we are absolutely no further forward for something which must be considered as vital post RDR.

  3. Well I hope that Mr Hoban receives a response – a courtesy he hasn’t afforded me since I wrote to him in October 2010 regarding the Mortgage Market Review.

    My local MP, Julian Lewis sent me a response to my correspondence about MMR within 48 hours – informing me that he had forwarded my concerns to Mr Hoban for a response.

    Still waiting….

  4. So now we are up to 75% of staff on consultation and rising. Who can I write to the express my ‘dismay over Mark Hoban’….? Next we will be told that the Govt have decided to levy us £100 million to prop up the service. In principle I support the MAS but it has obviously suffered a collision with the real world, a place Mr Hoban will not be coming to any time soon.

  5. 70% of mortgage brokers have de-authorised in the past 3 years, if 30 to 40% of IFA’s leave as a result of RDR then there will be another dramatic cut in funding from these firms leaving the remainder to pick up the Tab for these Vanity projects, or a little reality might creep in, as to where the regulators income will be comming from……….apart from more frequent and larger fines (which the FSA should not be allowed to keep on principle)

  6. Sometime ago when talking to a teacher friend I asked why IFAs were not giving financial education lessons in schools in Scotland. She replied “you are not a teacher”. The term “closed shop” came to mind. Has anyone dealt with teachers on financial issues. The individuals I have dealt with appeared somewhat removed from reality and seemed to expect because they were teachers to have enough money to meet all of their desires. It seems a pity the system does not recognize that the experts on a subject should be teaching that subject.

  7. Fergus Macpherson 10th November 2011 at 10:20 am

    When I listen to early mumblings, with the MAS being a classic example, I often know instinctively and very quickly, that this is something which will simply not work. I am neither a cynic, not am I a pessimist, but one simply knows that the MAS will be a ‘damp squib’. To assume that we will all simply log on to a web-site to have all our financial queries solved, without cost, is just silly. RDR will of course happen now. And there are some good points. But it is inconceivable that it will lead to more people receiving advice. It will make no difference to those who are of high net worth, for they will be used to a fee structure. But it will be a barrier to those who are less inclined to pay fees. Really, there is no point my banging on about this any more. The ‘proof of the pudding’ will be in 3 or 4 years’ time when it becomes patently clear that no-one is being encouraged to save reguarly into their pension or ISA, quite simply because we, the IFAs, will not be paid to push it. Stupid, stupid, stupid people at the top of the regualatory tree.

  8. It is hard to have any sympathy whatsoever for the FSA’s ‘poodle’…Mark Hoban…he feels me with dismay at the contemptuous way he seems determined to destroy the livelihoods of thousands of advisers. He has, like the FSA, no concept of accountability…you only need to read comments here to see that we wish he would depart the scene…

  9. Why did the people setting up MAS feel the need to offer a £349,341.00 salary to the highest paid director? Can you imagine the pension contributions required to fund the pension rights when they fall on their sword in a few years time due to its failure? Will we ever see value for money out of these financial services quango’s?
    I still find it funny when the spell checker offers up “ guano’s” for quango’s do you think my computer is trying to tell me something?

  10. If we pay for it via our levies, shouldn’t we have some sort of say in what happens?

    it would be interesting to know how many IFA’s earn £350,000. i bet most are more like £35,000.

    Why not have this type of function fall under an organization such as AIFA or similar?

  11. Anonymous @ 10:37

    Spot on.
    No taxation without representation.
    It’s a basic strand of democracy. Not that the f-pack understand such concepts.

  12. Peter Davies @ Create Wealth 10th November 2011 at 10:47 am

    The Money Advice Service has been given a budget of over £40million for 2011/12 and now we hear 3/4 of the staff have been put on consultation but with 50 new staff to be recruited. This is an example of Government Organisations being unaccountable and no clear thinking going on at the top with regard to the aims and policies. In my opinion the whole thing is a disgrace and guess who’s paying for – we are. shocking. Please give me some support on this IFAs.

  13. Ah sad, poor diddums.

  14. It only took 6 months to work out that people sitting in a posh office in London are no use to ordinary people in Hull or Leicester.

    Bums on sofas, that is what they need. A budget of £43.7 million is not to be sniffed at but it needs to meet the needs of the Man on the Clapham Omnibus rather than what a politician thinks is needed, or what a CEO who has never even met someone who earns £10,000 per annum and never will.

    Bottom up approach required folks! In all areas of regulation.

  15. First get the name right
    Money Guidance Service.

    Hoban; what a waste of a ministerial salary. I wouldn’t give him a job filing my paperwork.

  16. Maybe the Treasury should pay for the service then?

  17. Neil F Liversidge 10th November 2011 at 11:44 am

    I’ve never understood why IFAs should pay separately for anyone’s financial education on top of what we pay in taxes. Do law firms pay to educate the public so they won’t need a solicitor for conveyancihng? Do accountants pay for the education of individuals so that they can do their own tax returns? If the owner of my local bike shop was told to pay for my training to service my own Harley rather than paying him, the second word of his two-word answer would be “off!”

    Which is probably what we should be telling the regulators and politicians.

  18. Methinks the best use of that £43.7m would be to directly reduce the country’s budget deficit. That would send a more salient message than the codswallop these overpaid idiots keep dreaming up to feather their own nests.

  19. I have recently done some generic financial planning seminars for people being made redundant. Of the relatively small but I am pretty certain representative number I have spoken to, who are keener than the average person to get some financial advice, not one of them has heard of MAS – I have asked. My fee for a three hour workshop is pretty modest, £43.7m of funding would finance nearly 175,000 such workshops per year, at a class size of 20 that would probably fund at least basic financial education to 3,500,000 per annum. I would suggest that nationally that would have more impact than a website nobody knows exists and although a few would have to run / coordinate, they wouldn’t need to be paid £350k! But hey, why use an experienced resource which already exists when you can just blow another wad of other people’s money?

  20. As always, a simple answer presents itself.

    Increase the levys on advisers by 25% – that should do the rick. Oh, an award yourself a bonus while you’re at it.

  21. Speaking as an IFA and qualified teacher: there was an educational initiative produced in the 90s by the PIA – for VIth Forms. As a VIth form tutor at the time I had experience of teaching on this project. There was nothing I could do to make the subject interesting and in the end I abandoned it rather than inflict further pain on my students. I came to the conclusion that a GCSE Maths syllabus is ideal for setting practical questions relating to mortgages and investments. The advantage of this is that pupils will have to learn it if they want to pass Maths. If there is no public exam at the end of it you might as well forget it…

  22. Is anyone (other than Hoban and the other assorted no nothings) actually surprised that it actually doesnt work ??

    anymore than RDR will NOT work

    Hoban (who as others have said wouldnt hold down a job in the real world) if you are you dismayed by this you are gonna be besides yourself after 01/2013 my old china !!!!

  23. I am going to have to disagree with Ken Durkin. According to FOS, teachers do not realise that an endowment might not produce enough to pay off the mortgage even if the illustration showed a lower projection with a maturity value less than the mortgage amount.

    Please do not be too downhearted, though, Ken. Even Chartered Accountants apparently do not understand tax issues.

    It seems that the only people who understand finance at all are IFAs and me.

  24. When I read the headline, I thought this article was going to be about Hoban’s concern at what a massive waste of levy-payers’ money the MAS has swiftly turned out to be. But no ~ sadly, quite the opposite.

    How could any body but the FSA decide ~ without consultation, of course ~ to hive off, rebadge and beef up the MGS, as was, with what appears now to be FOUR TIMES AS MANY STAFF as there’s actually demand for?

    The FSA’s total lack of responsibility (or accountability) when it comes to gaily pissing away tens of millions of pounds of OPM is simply breathtaking. And sickening.

  25. I wonder if the MAS was one of Mr Hoban’s pet projects that he thought would mean IFA’s and other advisers would only be needed in complicated cases.

    Must hit him hard to realise his ideals may prove him wrong. If so what’s the better we do not get any apology?

    If the MAS is failing what other brilliant ideas they have come up with will also fail?

    Just a great shame they cannot be made liable liek the rest of us.

  26. If the MAS was an IFA the FSA would be in like Flint with such a shambolic display of mismanagement. But if it was a bank?

  27. i would willingly sell my house and all its contents to fund the MAS,,,,,nah !!! just kidding

  28. S0 why are A4e advertising on behalf of the CFEB (MAS) for none qualified Advisers and coaches (their words) on £20,000 for a 37.5 hour week working from home company pensions etc. seems like another smoke and mirror trick to me which know doubt we will be paying for.. the advert is headed Money advise service and is stated to be a permanant job!

  29. Re – Anonymous comment – “Fall under AIFA”

    Another daft idea !

    AIFA do not have any power or influence, if they had, the RDR would not happen until Mifid II was clarified.

    As it happens, Mifid II will just make things more complicated.

    The people who regulate our industry and “waste” our money on these daft ideas need to be accountable for such prolifligate waste

    Ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh!

    One day they will drive all IFAs over the edge of reason.

  30. Terence P.O'Halloran 16th November 2011 at 1:38 pm

    The CII, the LIA, the ABI and BIIBA all had , or have in the CII ‘s case, schools educational modules presented by practitioners, as representatives of the industry (not themselves) since I was on the schools circuit with many others, in the mid 1970s.

    The talks, mainly to sixth form students and beyond are well received. Why do we require government interference tbhrough people like Hoban who has a closed mind where financial services are concerned.

    R.I.P. MAS, you were an unwanted and unwarrented child of pure fiction.

Leave a comment