Money Marketing readers will have enjoyed some of the fiery language directed at the Money Advice Service in Parliament in the last fortnight. We were accused of being a “play-ground bully”, offering a “crap” web-site, charged with blowing £20m on TV advertising and overpaying staff. These are serious concerns which require serious responses, so let’s remind ourselves why we are here. It is because our financial capability as a nation is low and there is a huge gap in the provision of advice.
Around 23 million people do not know where to go for impartial advice on credit and borrowing, only 15 per cent can afford a financial adviser and just one in five people have someone they trust to confide in about money. To help fill the advice gap, Parliament agreed by consensus to set up a national financial capability agency. No one else is dedicated to doing that job. We fulfil a unique purpose. We do it in three ways – providing free, unbiased, preventative financial advice – online, over the phone and face-to-face; co-ordinating and funding debt advice and supporting financial education for young people and vulnerable adults.
As one MP put it, we are still a “start-up”, so most people do not yet know we exist. Millions face tough times and life choices with major financial consequences and need to know there is advice available. That is why we are intensively targeting swathes of the population who are likely to need our advice. Others run services driven by the search for great deals or provide expert advice but our principal aim is to bring about a long-term change in the way people behave with their money.
We do not aim to compete with Money Saving Expert, Citizens Advice or IFAs. Each does a great job. We need to complement these and many other roles. I was struck by a remark on the MM website which said: “I strongly suspect the vast amount of people visiting MAS enquiring about protection or savings and investments or whatever are of no interest at all to IFAs.” We know that many IFAs do accept clients on lower incomes but it highlights how the advice gap is filled and our distinct roles.
We have only being going as the Money Advice Service for just over a year and have chalked up some encouraging results. In 2011-12, we provided over 74,000 face-to-face sessions, took 84,000 phone calls and had over one million online visitors. Despite what MM readers may have heard, over 500,000 people visited the online healthcheck, with 58 per cent taking away a personal action plan and nearly 100,000 taking one or more immediate actions.
We aim to reach 1.9 million people in 2012-13 and 11 million annually by 2016-17, with the aim of developing long-term financial capability by having half of these stating we helped them take action.
We are aware of the frustrations. Our chief executive’s remuneration has been cut. We are learning to listen more, be more transparent and responsive. And we are keen to hear views from Money Marketing’s readers.
Gerard Lemos is chairman of the Money Advice Service