The Money Advice Service plans to slash its marketing budget for next year by more than 50 per cent as it sets out its response to the Farnish Review.
The MAS has today published a consultation on its business plan for 2016/17. The plan outlines proposals to cut its total budget by £6m, from £81.1m to £75.1m.
The ‘money guidance’ budget will be reduced by £4m, from £34.1m to £30.1m, while the debt advice budget will fall by £2m, from £47m to £45m.
The biggest spending reduction comes through marketing, which will be slashed by 55 per cent from £8.8m to £4m. It will be the second year in a row the marketing spend has been drastically reduced.
The MAS has also confirmed it has ceased “all dedicated brand building marketing”.
“Instead, customer communications will seek to co-ordinate partners,” the MAS says.
“This co-ordination will address social norms about spending and saving; and topical money issues that can engage consumers with their money.
“We will particularly focus piloting, testing and learning on segments that are disengaged from managing their money.”
One idea the MAS has piloted is an “assisted digital” service that combines website information with telephone support, without straying into regulated advice.
The MAS says: “After customers have read complex information on financial guidance websites about products, some of those customers may still need support that reduces confusion and helps them to take action.
“Thanks to the interest and involvement of moneysavingexpert.com, we ran a pilot for six weeks of just such a service. An invitation to call a dedicated Money Advice Service helpline was embedded at key points in moneysavingexpert.com pages dedicated to helping consumers choose basic bank accounts, cash Isas, savings accounts and credit card balance transfers.
“The pilot showed that there was a low but focused demand, and that we could meet the customer need without straying into regulated advice.
“We are reviewing the pilot results in the light of our budget for next year. But we think an operational version of this service, offered to financial guidance websites that aim to educate and inform consumers about product choice, could be a promising way of bringing the support offered by a helpline to customers that need it.”
In addition, the MAS has embedded a new strategic objective – ‘Improving access to guidance and advice’ – in its business plan.
The pledge means that over the next three years the MAS will work to “enable more people to access the right information, advice or guidance when making financial decisions”.
The Treasury is currently consulting on how public financial guidance should be structured and funded. The consultation is running alongside the Financial Advice Market review.
In its response, published yesterday, Apfa called for the Money Advice Service, The Pensions Advisory Service and Pension Wise to be merged.