The Money Advice Service has set itself an ambitious target of reaching more than 11 million people a year by 2016/17, as its budget for 2012/13 doubles to £86.8m.
The MAS budget is a sensitive subject for IFAs, as it is funded by a statutory industry levy. Last week, the FSA announced the 2012/13 budget for the MAS is doubling from £43.7m in 2011/12 after the MAS agreed to take on a new responsibility for delivering debt advice.
Speaking to Money Marketing last week, MAS chief executive Tony Hobman says the MAS will effectively run two budgets. The money advice budget will rise 6 per cent to £46.3m while £40.5m will go towards debt advice.
The money advice budget will continue to be funded by all financial services firms while the debt element of the budget will be funded by banks, building societies and lenders.
Hobman says: “We are very conscious that our costs result in an industry levy. We are alive to the need to show value for that and to explain what we are doing and why.”
He says he is pushing for the service’s online healthcheck, which launched last June, to issue one million action plans next year and come into contact with 1.9 million individuals. He adds he wants the MAS to contact over 11 million individuals in the next three years.
The online healthcheck asks people a series of short questions to encourage them to think about budgeting and planning their finances. At the end of the process, consumers are given a personalised action plan which suggests the types of financial products they should consider.
Since its launch, the healthcheck has had over 400,000 visits, against a target of 500,000 visits by the end of March.
Hobman admits that the MAS currently lacks the ability to drill down into the data it holds to see what action people have taken after receiving their action plan.
The target to reach significantly more people is taking place against a backdrop of a wide-ranging review of the service, which saw half of the 150 MAS staff put on consultation in November.
Hobman says: “It is fair to say that part of our restructuring and refocusing of the service is about having much better management information so we can measure and track customer journeys. That is important to us because we need to keep our offering relevant and personalised, so we need to know what people are doing. But it is also important so we can track our own performance and communicate to the industry what volumes of business we are directing to IFAs.”
The MAS has been on the receiving end of fierce criticism from advisers over the last year, initially after its TV campaign in June which promised “free, independent and unbiased advice”, and more recently in December when it said it was moving towards offering an “advice-type” service rather than information and guidance only.
But Hobman maintains there is a clear distinction between what financial advisers do and the service MAS offers.
He says: “It is absolutely about providing generic, unregulated advice, we are not crossing that boundary. We maintain a belief that by doing what we are doing and generating much better financial awareness and capability across the UK, we are growing the market for people who are then engaged with their finances and understand there are products they do not have and even that there is specialist advice they need and do not have.
“We are very clear that what we want to do is maximise the potential of those people who should be sitting in front of an adviser and are prepared to pay a fee for that.”
Thameside Wealth director Tom Kean says: “A cynic might question whether the MAS has been created to fill the advice vacuum created by the RDR.”
Plan Money director Peter Chadborn says: “Debt advice is out of IFAs’ remit, so it is right we should not have to pay for it. I do not think the MAS is going to encroach on advisers’ territory, the service is about providing knowledge of the basics. Advisers offer a much more comprehensive financial planning service.”