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MAS chief: The long road towards closing the advice gap

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I have read with interest the comments from Emma Simon and Mark Garnier MP about the Money Advice Service in the last couple of editions of Money Marketing.

I am optimistic about the help we do and will continue to provide to millions of customers. More people than ever before are using the service – over 2.5 million used our website, phoneline, webchat and face-to-face service between April and June 2013.

Furthermore, almost 80 per cent of customers say that they are taking action on the basis of the advice they have received from us, and our customer satisfaction scores are higher than they have been before, with over 90 per cent of people saying they will return to the service and that they would recommend it.

Meanwhile, the debt advice partners we fund with £30m – including £23m to Citizens Advice – helped over 150,000 people in 2012/13 and are on course to do so again this year. That’s a 50 per cent increase in the number of people helped, with the same funding, compared to 2011/12, the last year before we took over oversight and funding of the sector.  

But we are certainly not complacent. We have turned a corner but the road ahead is long. Our recent Financial Capability report highlighted how half the adult population is struggling to pay bills and meet credit commitments. Over 40 per cent of adults would have to think about how to pay an unexpected £300 bill. And there are worrying trends in people’s financial skills and attitudes towards money, with over 15 per cent unable to understand a bank statement and around 20 per cent saying they’d take £200 now rather than wait two months and receive £400.

There is a massive task for us, working together with partners across all sectors involved in financial capability, to help people understand their finances more and make the most of their money.

So the priority for us this year is the development of a long term strategy to which everyone can sign up, which will set out a way forward for improving the financial wellbeing of people right across the UK. We’ve been listening to partners, collecting evidence on what works in terms of helping people manage their money. We now need to pull together the strategy working with the many different organisations and individuals across the sector and making the most of the combined wealth of experience.

I talk a lot about partnership because I am committed to this approach. The Service does not seek to compete with anyone in the sector, offering paid-for or free advice (such as Citizens Advice), but to complement what is already in the market, signposting customers to others, just as other organisations signpost to us. That includes IFAs.

Since I took up my position here at the Money Advice Service I have met a number of IFAs and IFA organisations. We’re working with various representatives in the regulated advice sector to agree how and when to refer customers to paid-for advice which we cannot provide ourselves.

Consumers are at the heart of everything we do. We must work hard and fast to close the advice gap which still stands at around 19m people. So my priority is to help people get the money advice they need, whenever and wherever they need it, whether it is direct from us or via other experts. I hope this is a shared goal which everyone, including the financial advice community, can sign up to.

Caroline Rookes is chief executive of the Money Advice Service.

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. I must be missing something???

    I thought it was illegal to give advice abbout financial products unless you were authorised and regulated???

    Seems our esteemed MAS Chief Exec hasn’t heard about this as the number of times she refers to “advice” the MAS are offering is staggering.

    No wonder the general public are utterly bemused.

  2. Wait – no protection for the innocent public (taking “advice” from the MAS) from the FSCS, no authorised advice, no higher-level qualified staff requirement – sounds like another UCITS scandal waiting to happen.
    FCA should be ashamed of themselves.

  3. I would like to see specific examples of what the MAS calls ‘advice’.

    What exactly are they advising that 80% of their users are “taking action on”?

    As mentioned above it can’t involve any specific financial products so it must be generic information. In other words a huge operating budget to provide common sense to the public.

  4. “So my priority is to help people get the money advice they need, whenever and wherever they need it, whether it is direct from us or via other experts. I hope this is a shared goal which everyone, including the financial advice community, can sign up to”
    Sorry Ms Rookes.
    I am not in favour of anything I have been blackmailed into paying for.
    I believe MAS will not employ ex IFAs’ so there is another reason I will never support you.
    This fiasco should be funded by the taxpayer. That would determine how long it would function, do GPs’ pay for healthy lifestyle advice to the general public?

  5. I think the IFAs need to draw a line under past MAS criticisms and allow Caroline a chance to implement her strategy. I sat on the Thoresen Review which recommended the establishment of MAS. It was never intended that MAS should compete with IFAs to provide advice that would enable a customer to avoid using an IFA and be able DIY. It was though expected that MAS would educate people who the IFA market wasn’t interested in. Inevitably, in doing that public service, IFAs are going to find their target consumers use MAS tools and may feel able to manage their own affairs. Execution only brokers have dominated this sector providing advice that comes so close to the definition of regulated advice on financial products. MAS do come close to this themselves with their limited annuity table. MAS are still spending our levy on paying for search terms that other IFAs want to buy so I think there is an onus on MAS to look at referring more people to IFAs whether that is a specific panel of specialists such as MAS do for Equity Release or more generally. If Caroline says that she is willing to do more in this area then I for one am prepared to take her at her word and give her time to do it. As a group, we will get more from MAS if we are prepared to engage positively with them.

  6. No Alan,
    you are wrong, all we will get is a bigger bill.

  7. @Alan – I pretty much agree with you. I point consumers at the MESS (sorry I mean MAS) especially those I cannot afford to RISK advising. I also make extensive use of the MESS booklets and consumer guides as they don’t have the spin of an insurance company, nor as many glossy colour pictures of old people with smiley american teeth.
    My criticism of MESS remains having “advice” in it’s title, hence my reference to it as “MESS”, the fact it is CROSSUBSIDISING by taking money from us to be used for non IFA clients and the exhorbitant sums paid to senio MESS staff well in excess of what most in the industry earn. Pay the chiefs less and you can have more indians.
    As to whether I think I pay too much to MESS and the answer is NO. i get good value for money, but could be getting more if it was used for Indians and not chiefs.

  8. Conclusion – i will give Caroline Rooks the benefit of the doubt whilst continuing to campaign for a name change before they finish reprinting all their booklets. most of which are still in the FSA name and not MAS, so it’s not too late to change your spots and call yourselves what you truly are Ms Rooks, i.e. a Money Guidance Service.

  9. There is more than 1 issue here. Whilst I agree 100% with all other comments that we should not have the word advice used in this context where MAS is “info only” , there is also the return on your investment.
    The IFA community have spent large sums of money on this enterprise and are only now being engaged at an adult level (for which I do tip my hat to Caroline) but where there is no guarantee of an IFA referral and where MAS is servicing a market that an IFA doesn’t want (apparently) why is this being funded by IFA’s. There should be a clear distinction wherein the IFA community is paying for the benefit it gets and mr/mrs tax payer is paying for the service they are getting.
    This will I believe take a lot of the sting out of the tail.

  10. Could we have some examples of advice provided and action taken?

    Many thanks.

  11. The title says it all.
    The Long Road. The advice gap will never be closed. The road is too wide as well as too long.
    The longer it gets the more money they will need.
    Like the FCA, they will dream up more and more ideas to perpetuate their own position.
    We will be asked for more and more funding, for which we will need to increase our own charges.
    That is how a quango operates.

  12. I resent deeply being forced to fund the MAS at all, but most of all I resent being forced to fund the £30m the MAS allocates to debt advice, which has nothing whatsoever to do with me. I advise people on wealth building and wealth preservation. The plight of those in financial difficulty is not my responsibility.

    The MAS is nothing but a privatised version of the CAB, the proof of which is the number of CAB’s across the land complaining about a creeping starvation of funding from local and central government.

  13. £23 million to CAB? Why are we paying anything to CAB? That is ridiculous.

  14. Dear Ms Rookes

    You are losing the battle on all fronts. The adviser community thinks you are a waste of time. The Parliamentary committee wonders why you cost so much and now the press is also antipathetic. Please see Saturday Daily Telegraph – back page Your Money.

    I well understand your great reluctance to give up a juicy salary in a cushy job, but surely it is now well beyond time to take stock and consider the position of this less that popular Quango.

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