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Money Advice Service: IFAs continue to misunderstand us

Money Advice Service chairman Gerard Lemos, who last month called for Money Marketing readers to give their views on the service, responds to the feedback he received.

Gerard Lemo

Well, many thanks for your views. I cannot pretend I was expecting a clamour of endorsement and, no surprises, I did not get one. I do not expect everyone to support how we are going about our work but I remain frustrated with the continuing misunderstanding – willful or otherwise.

Responses seem to fall into three categories. Without turning this comment into an essay, let me take them each briefly in turn.

First and foremost is the perception about how much people are paying for the service and its value for money. IFAs pay for around 16 per cent of this year’s £46.3m Money Advice budget – £147 a year each. None contributes to our debt advice activity. But I understand the anger and we have committed to working with the FSA to develop a long-term funding model from the industry levy.

One year on, we know we have reached over 1.3 million people. It is a start of a long journey to fill the enormous 19 million-strong advice gap by getting to 11 million people annually in five years’ time. It will make for a more financially educated population, with sensible financial behaviour steadily becoming the norm. That is what the Financial Service Act demands. Common sense tells you that many of these will be approaching IFAs for their expert advice.

Next is the perception that we are merely duplicating IFAs’ work and the role of others in the advice sector. I accept that we may overlap in places but we occupy a gaping chasm in the advice landscape overall. This week’s report, showing only 18 per cent have ever used an IFA, reinforces this.

At one end, Citizens Advice provides an outstanding service, predominantly for those in crisis, while smart commercial operators such as serve the other end. The former promotes equality and diversity and helps with housing, benefits, employment, relationships, legal and (with funding via us) debt advice. It has 70 years of experience and a combined income of over £250m. The latter, newly incentivised as part of, generates revenue from commission on sales.

We are totally different to both. We are focused on providing independent and free advice to the millions who face uncertainty about money at key life stages. Nor do we seek to supplant what IFAs do. In fact, we know from correspondence that many IFAs use our tools, including the ones on our recently upgraded website.

Finally, there is the issue of our marketing spend. In fact, we have not spent anything like £20m yet – that is what is in the budget for 2012/13. We need to engage people and encourage them to take action on their finances. Some comments bemoan that we are unknown. As a newcomer, it is hardly surprising and why we need to drive awareness so we can help millions who need our help.

Thanks to everyone who left a comment. I hope Money Marketing readers will keep such views coming in as we develop our next business plan. We will be consulting later this year and are keen to get the views of policy makers, consumer and advice organisations and all sections of the financial services industry.

Meanwhile, although I was not surprised that Money Marketing did not cover it, please take a look at our website, whose first upgrade took place earlier this month.

Gerard Lemos is chairman of the Money Advice Service


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There are 26 comments at the moment, we would love to hear your opinion too.

  1. The sad thing is that the MAS could shine as a bastion of information and common-sense.

    Being funded by the industry that it appears to sneer at is one of the aggravations. A second is the distorted logic that expresses itself in alignments with certain mortgage brokers, the RBS and others.

    The job of the MAS must be to educate those who wish knowledge but are leery of approaching an adviser.

    As soon as the MAS moves into ‘advice’ or partiality then it loses not only the small element of support that it currently sustains but also the respect of the entire community for pursuing the usual financial services quango blueprint of empire building

  2. I am one of those IFA’s who pays 16% of your Budget. I dont care if its 16 or 1%, its just an additional cost on top of the all the others. You are there as a public service to reach millions of those who dont use IFA’s anyway. Why should our industry fund you to serve as a public body? Public purse shoud fund you as you are there to serve the public.

  3. This highlights yet again that MAS and its board are divorced from the real world.

    After spending millions MAS has a thid rate website and the recent ‘enhancements’ are little more than a mild plagiarism of moneysavingexpert and more useless calculators, plus the one calculator I did find semi useful, annuity rates, is now far more cumbersome to use post facelift.

    Recently published accounts show MAS is paying top whack salaries to its senior management who obviously have little grasp on how to deliver a cost effective service that will actually help the public.

    I don’t think IFAs are worried that MAS is stepping on their toes (nowhere near an issue its current form), they’re just frustrated to see the FSA gravy train continue with millions more being poured down the MAS drain.

    Good to see the wildly overpaid Toby Hobman is stepping down, but Mr Lemos continues to pocket £84k a year for chairing this mess – proof that academics don’t necessarily make good managers or businessmen. Perhaps he should follow Mr Hobman and throw in the towel too, with both being replaced by individuals with significantly more hands on experience of helping the public with their money and running a proper business.

    I have no faith matters will improve and expect MAS will be shut down within 2 years having squandered a fortune.

    Meanwhile, Money Marketing should run a story on possible candidates for MAS CEO, I’m sure the industry would be better at picking someone than Mr Lemos & co.

  4. I think IFAs understand MAS very well, and thats the problem they cannot hoodwink us like they do some people!!

  5. have i missed something once again,no recognition or reference to the many IFAs that provide their time and expertise free of charge to deliver the MAS presentations.Please address this Mr Lemos,they do say that a thankyou costs nothing!

  6. “I do not expect everyone to support how we are going about our work but I remain frustrated with the continuing misunderstanding – willful or otherwise”

    If Mr Lemos thinks the IFA community do not understand then how does he expect the general public to understand

  7. Really MAS? Really? Try showing us we’re wrong then! Instead of rubbing our noses in it, and raiding our pockets.

  8. Although I welcome a service that tries to extend the knowledge of the general public as MAS is trying to do it needs to work closer with IFA’s and not an unauthorised sources of information.

    To my knowledge money saving expert only gives information on unregulated products and should not be giving information on pensions equity ISA annuities etc. So why are they quoted in this press release from MAS and maybe this highlights some of the problems with this service. If the service is meant to be educating the masses then surely the first point is that they should be educating the masses on getting advice from authorised and regulated individuals in the relevant field of expertise and not journalists.

    From FSA register for Money Saving Expert

    Activity Name: Agreeing to carry on a regulated activity

    Limited to carry on regulated activities.

    Activity Name: Arranging (bringing about) deals in investments

    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Retail (Non-Investment Insurance)
    Activity Name: Making arrangements with a view to transactions in investments

    Investment Instrument
    Non-investment insurance contracts

    Customer type
    Retail (Non-Investment Insurance)

  9. oh we understand you MAS, we understand you very well!

  10. Ian Parker 10.11am
    “many IFAs that provide their time and expertise free of charge”
    Forgive me if I am wrong here but have we not been advised that we should not be doing work for the less well off from cross subsidy( higher charges for more well off clients). Surely giving your time free of charge or Pro Bono is exactly that.

  11. MAS does not offer advice???
    Who is trying to fool who?
    So when you get your 11 million customers(bullshit best describes this man’s dreams) what will you do with them?
    How will you cope when the FSA decides that you are actually servicing them and that they will not go away?
    Remember Richard Branson (who could forget him?I can!) when he offered no ties advice as he said IFAs and insurance salespeople were ripping people off and he was a saviour to those poor disadvantaged people harangued by people selling products,he started with ISAS, and then when the clients wanted advice he turned gamekeeper and offered (filthy word he called them|) links to IFAs.
    Experience says it all-I can see another debacle on the horizon and guess who will have to pay for it.
    Why not get the MAS to give ‘free advice’ vouchers worth 500 GBP, (redeemable with qualified IFAs), to 50,000 consumers-this is equivalent to 25 million smakeroos.
    Too simple and ‘noses in troughs’ will not get their money-what a shame.

  12. TerenceP.O'Halloran 27th July 2012 at 11:10 am

    When one earns a large salary one tends to gain a deluded sense of one’s own importance. Gerard Lemos states that it is only £147 per year per adviser. Is that on top of the £8,000 cheque that I have just paid out Mr Lemos or included in it?

    As for his:

    ‘We have already reached 1.3 million people and we want to get to the 19 million strong advice gap.’

    Where do you get these figures from Mr Lemos? Did you ask 2,000 people which is the usual basis for distorted statistics? The man thinks the reader is a fool.

    Mr Lemos: We don’t want you to spend £20 million let alone “anything like £20 million.” For me, and those that I have researched as a cohort of IFAs and consumers – we want you to shut your doors. Go and find a proper job. Preferably one that is necessary for the economy.

    In fact join Walt Disney’s crew; they are the people who deal in fantasy. The British Government has enough fantasy with its politicians without you joining their ranks on a large salary.

    Research? I don’t think so. MAS is the manifestation on a fantasy born of socialism that is unnecessary as a cost to Society. Trying to justify it just makes matters worse. You, and MAS, are unnecessary.

  13. My job is to educate the public that use my services, as well as providing them with good advice and suitable products. I am better placed to educate them than MAS.
    If people want to be educated they should contact an IFA.
    There is also a plethora of information available on the web and other media that can assist people who want some general knowledge.

    If the government/FSA or whoever else want to set up some other service (MAS) they should fund it through public funds, not mine or other hard pushed IFAs who are tearing their hair out trying to suvive in this industry.

  14. Independent and Free? Free? It was’t free when it was payable from general taxes and just because we are paying for it now, doesnt make it any less free. I’d like to know what the FSA would say if I used that kind of language in my business?

  15. The whole concept is disgusting. I lodged a complaint last week. What they should be doing is promoting independent advice instead of direct to providers! They should provide contact details for 3 local IFAs and 3 national IFAs. Why can’t they do that instead of trying to drive IFAs out of business!

  16. A lot of negative responses here, but I do think that the attempt of Mr Lemos to try and open a dialogue should be welcomed. Some people/organisations wouldn’t even do that, especially when you consider the amount of criticism that has been levied at the MAS.

    I am intrigued to see that a “Business Plan” is to be developed by MAS though. Since when was the MAS a business? An interesting term to use, don’t you think?

  17. Which part of the following have we misunderstood ? :
    “Executive directors Karen Broughton, Mark Fiander and Lesley Robinson received total pay packages of £148,000, £117,000 and £147,000 respectively.
    The MAS remuneration committee has decided to award performance-related bonuses to Broughton, Fiander and Robinson.”

    The MAS remuneration committee !!!
    Made up of the eight non-executive directors sharing another quarter of a million between them. Which part of this have I misunderstood ? The vast majority of the population are disgusted by these undemocratic Quango’s ……. but this particular one is worse because we have to pay for it directly. Gerald, your article is mere semantics. You are a parasite on other people’s work and money. . . .

  18. Larry in London 27th July 2012 at 2:40 pm

    Hello fellow sojourners through the Valley of Taxation and Canary Waters.


    The public (and the IFA community) are sick of overpaid self-serving QUANGOS who’s only purpose is to invent non-problems to fix.

    The road to bankruptcy is paved with those who have tried to educate the public. The only reason this fact is lost on the idiots at MAS is that they are trying to do it (and failing) with OTHER PEOPLE’S MONEY.

    The whole thing is a farce and needs to be wound up before they spend another couple hundred million £ of OUR MONEY.

    And, for the avoidance of any doubt, this is a complaint!

    Love and kisses

    Larry xxxx

  19. Kevin Grimwood 27th July 2012 at 4:11 pm

    So they now admit they give advice not information.

    The point they are missing is most IFA’s are small businesses anf MAS does compete to some extent with us.

    We fund MAS bu compulsion not choice, how many other industries pay to fund competitors do tesco support Sainsbury and Asda.

    If MAS offers free advice it should be considered a charity and we would then be asked to contribute and could make our own minds up it seems the powers to be want to charge us for everything without any concerns for affordability.

    The need for affordability applies to our advice why doesn’t it apply to FSA,FSCS and others that charge fees and levies?

  20. advice is not free, even the FSA says that so it must be true!

  21. IFAs are well aware of the agenda behind the MAS.

    To accuse them of being “willful” of any act that is against the public interest is disingenuous and hurtful.

  22. Does this man really think that he and his MAS are going to make a difference? Can he be that deluded? He is cleverer than me, because I can find no advice on the site at all. He chairs a body dreamed up by the last Government, the same lot that dreamed up all the rubbish from stakeholder onwards, and endorsed in a so called independent report, just like Wanless, Sandler et al. For the life of me I cannot see why someone in No10 or 11 does not simply call time on this farce.

  23. No such thing as a free lunch!

  24. MAS provides “advice that’s free….now that’s a breath of fresh air”.

    I’m not entirely clear on exactly what part of that “knocking copy”, IFAs are supposed to have misunderstood, willfully or otherwise……

  25. Peter Davies @ Create Wealth Management 30th July 2012 at 11:44 am

    Gerard, I agree with a number of points that you raise, however, I still do not consider it morally right for firms to pay towards the financial education of the UK public. I my opinion it is akin to theft in so much that money is taken from us without our express consent for something that we dont wish to support. I WOULD BE GRATEFUL IF YOU WOULD KINDLY REPLY TO THIS POINT.

  26. So apparently the responses fall in to 3 categories? I think you missed a crucial 4th category Gerard – willful or otherwise ……. the matter of the extortionate salary that you are taking for your part time role as Chairman of the farce that is the MAS!
    I wonder if this was a deliberate oversight or perhaps a guilty omission that you realise you are being paid far too much to ‘Chair’ this whole mess?
    Surely the time is right to join Tony Hobman in ‘early retirement’?

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