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Money Advice Service: IFAs will gain from our work

The Money Advice Service says it is not designed to compete with IFAs but will drive demand for advisers and their services.

Last week, the MAS launched its free healthcheck service, which acts as a generic online financial planner and links to other MAS services such as budget calculators and comparison tables.

It also rolled out a £4m national advertising campaign which includes a TV ad to raise awareness of the MAS that will run for two months, followed up by adverting campaigns on billboards and online.

The MAS, which was the Consumer Financial Education Body, launched in April and is funded by a statutory industry levy. The healthcheck service asks consumers a series of short questions about issues such as their attitude to regular saving and how they would cope with an unexpected increase in living costs.

It then provides a personalised action plan to encourage consumers to ensure they can cope with a change in circumstances and that they have the right financial provisions for them, such as saving for a mortgage, insurance, or retirement plans.

The MAS says consumers will be signposted to IFAs and other services where appropriate.

It has a budget of £43.7m for 2011/12, with over £2m to be spent on the healthcheck service. In addition to its online healthcheck and website, the MAS has a network of 90 advisers across the UK, covering 250 regional locations and a phone advice service. It is targeting 500,000 users for the healthcheck, 90,000 users for the face-to-face advice service and 90,000 users of the advice line by the end of March 2012.

In a briefing with the MAS last week, Money Marketing asked chairman Gerard Lemos what he would say to IFAs who are angry at having to fund this service which may result in loss of business for them.

Lemos said: “We do not see ourselves as in competition with IFAs. Our job is not to take business from IFAs but to provide information to people who do not have an IFA in the first place. We have to provide a business plan to the FSA and the FSA distributes the cost of that to regulated firms. I understand the implications of the RDR and all the rest of it, but we see ourselves as supplementing demand for IFAs and even driving demand to them.”

On product recommendations, MAS chief executive Tony Hobman said: “We are never going to recommend a specific product to someone because we are giving unregulated advice. What we will do is talk generically about types of advice, which will link through to things like comparison tables but not in a way that recommends one specific product.”

Technology &Technical managing director Kim North believes the MAS should be funded by the Government rather than the industry. She says: “The MAS should put its money where its mouth is and start talking about independent financial advice on its website and referring consumers to IFAs at the end of the online healthcheck process.

“It is misleading for the MAS to say the advice is free, when it is being paid for by IFAs.”

Yellowtail Financial Planning managing director Dennis Hall says: “We are constantly bemoaning the fact that our costs mean there is a huge section of society that do not get advice because they cannot afford it. The MAS ought to help that. But IFAs help people identify their needs, and then sell to make people take action. The MAS will not be able to do that.”

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. As an Ifa and a volunteer presenter for the Money Advice Service,i think this was an ideal opportunity for Mr Lemos,to thank the industry for the funding and also to thank the volunteers for their efforts without which the project would not survive.

  2. Peter Maxwell-Lyte 17th June 2011 at 9:15 am

    Have you looked at the site?

    My impression is that it’s very well thought through and I especially like the way they have done the Budget Calculator.

    Give credit where credit is due – it may help many people who are nervous about their finances.

    But I don’t see how it’s going to fan people into the offices of IFAs!

  3. Julian Stevens 17th June 2011 at 9:20 am

    Or, to put it another way, We don’t think the IFA sector is doing enough to promote the benefits of its services, so we’ll do it for them and, for the privilege, charge them whatever we think it’ll take. On top of, that is, everything else they already have to pay to support the existing regulatory structure and all the people who make very nice livings being a part of that structure. And all without any consultation, any Cost:Benefit Analysis or accountability. And we’re supposedly living in a free society?

  4. If we want to pay for advertising ourselves then we will. We do not need our levy monies being put to uses that potentially see us being made redundant!!!!

  5. Exasperated me 17th June 2011 at 9:25 am

    One day it will be the only ‘IFA’ left.

  6. It’s like the local butcher or baker being charged a levy on their business rates to help keep the costs down for a Tesco superstore.

    If the government and the FSA want to make sure good advice is available to everyone, then why have they done everything they can to decimate the independent advice sector ? Instead, they set up yet another quango stuffed with people who will be paid high salaries and gold-plated pensions.

    Moreover, do they not realise that there are millions and millions of people (me included) who simply distrust a government agency of any colour or persausion to tell the truth on anything.

    You can imagine what this agency’s advice will be for a low-paid person asking about planning for retirement ! They won’t mention that if they save through a pension, that the tax relief is largely illusory and that any guaranteed income in retirement will reduce eligibility for other State benefits. And it will be Stakeholder this and Stakeholder that with lashings of NS&I.

    The only good thing is that general public will use the website as much as the FSA website – not much.

  7. When will these bozos realize that trying to educate the public is the path to bankruptcy – not for them, of course – they’ve already made sure they’re on the right side of the fence.

  8. “IFAs will gain from our work”?… This is a subjective comment and completely untestable. But then we would’nt want to be tested and found wanting would we?……………………………..

  9. Whilst I agree with Peter Maxwell-Lyte in that I actually quite like a lot of teh information on the relevant websites my beef is;
    1. It should be called money Guidance and NOT Advice
    2. It is NOT free and I think the adverts need to be changed to free at the point of delivery, just like the NHS. People need to know who is paying for it
    3. Really the MAS should be funded by general taxation and NOT by the industry.
    4. Was the name of the MAS & wording of the adverts, particulalry towards the end EVER discussed with the FSAs Small Practitioners Panel?

    If not why not?
    If it was, why did they let it be named the MAS and what was their opinion on the advert referring to “Free, Independant and Impartial”

    The service as it is NOT the problem, in fact I am pro the Guidance Service, it is the title and who is paying which is totally WRONG.

  10. I don’t understand Kim North’s comment in the article “It is misleading for the MAS to say the advice is free, when it is being paid for by IFAs.” The advice IS free because the individual doesn’t pay. On the same principle that the National Health Service is free, I don’t expect to be thanked for helping fund it as a taxpayer!

  11. I would agree that it does encourage people to take advice as we have had several enquiries. But in all cases, while they needed advice they could not afford it. How can you effectively advise on say a £25,000 pension pot (with a couple of small complications) cost efectively for the client?

  12. Nationalisation, is the process of taking an industry into the public ownership of a national government or state. The FSA is an unelected government within a government. If the FSA is allowed to continue you will end up with one of the biggest disasters in the history of financial services.

    I have a better idea! Rather than MAS thinking they know how to market our services better than we do why doesn’t the FSA just lay off the IFA sector and give us more time with our clients rather than with our compliance officers? MAS is funded by a statutory industry levy (tax) and MAS are telling us that IFAs will gain from their work.

    If they are so sure why not fund MAS by a pecentage split on all this new business. If the split thereafter doesn’t cover the costs then the balance can be taken off any FSA bonus payments now or in the future. The idea being that a bonus should only be paid for success and not failure as is now the csae. At a time when the regulators have failed to regulate why should we assume they will do anything other than fail in their attempts at marketing?

  13. Prior to this MAS levy being put in place, just how much money did intermediaries ACTUALLY spend on advertising themselves?

    I don’t need financial guidance, so I don’t agree that I should pay tax for it. The MAS levy would seem the fairest way to pay for raising awareness.

  14. Anonymous | 17 Jun 2011 10:28 am

    You are missing the point.

    Private doctors do not subsidise the NHS.

    We in financial services are charged fees by the FSA which in turn has set up a ‘service’ that provides guidance not advice. The problem here being that people will see any ‘guidance’ received as ‘advice’ and will try and sort things out themselves without reference to the industry that is paying for the ‘service’.

    The advert then goes onto claim that it has been set up by Government (the FSA is meant to be free of government interference which is why it isn’t paid for by the taxpayer) which is quite clearly a blatant lie.

    I’m all for the service not the fact that it is marketed as free and advice – how the heck did it get by the ASA?

  15. Lemos said: “We do not see ourselves as in competition with IFAs. Our job is not to take business from IFAs but to provide information to people who do not have an IFA in the first place. We have to provide a business plan to the FSA and the FSA distributes the cost of that to regulated firms. I understand the implications of the RDR and all the rest of it, but we see ourselves as supplementing demand for IFAs and even driving demand to them.”

    What A load of ****
    when the MAS business plan starts to get too grand IFAs will no longer be able to fund it.
    If he really did understand the implications of the RDR and I seriously doubt that he does, even the FSA do not know the full implications,he would realise that there will not be enough IFAs around to give advice to people with no money. The compliance and regulatory costs surrounding advice are just too great.
    I am heartily sick of all the parasites that feed of IFAs. It is time to get out of this never ending bleeding us dry environment.
    Do dentists have to pay to advise people who do not care about their teeth or doctors have to pay to advise people not to drink smoke etc.
    If no grandfathering is the rule under RDR why could older IFAs not have been paid to give this generic advice?
    Why do we need yet another quango with directors & CEOs which will cost the industry a fortune and benefit no one.

  16. Dear Anonymous, If I was unclear I apologise.But I’m sure you get my point..there is no financial advice provided by MAS just information. IFAs pay a large levy for this information to be provided. I truly hope the best find an IFA search seen at http://www.unbiased.co.uk is added to all MAS marketing activity.

  17. I agree very largely with Phil Caste’s comments, not least because the MAS was created with no consultation of the industry, least of all by way of any sort of Cost:Benefit Analysis.

    On what basis were the anticipated benefits of the service quantified relative to its annual cost of nearly £44m? Will those forced to fund it derive, collectively, an additional £44m of revenues for providing their services to those who come to them in the wake of having visited the MAS site? But that, of course, is not the criterion, is it? Rather, it just sounded like it might be a good idea to raise awareness of the potential value of taking advice, so let’s roll it out, charge the industry whatever we feel like spending on it and if it doesn’t work, well, what the hell?

    And, that aside, is any attempt to be made to determine the success or otherwise of the service? Is there any facility for IFA’s to report how many enquiries they’ve received from people who’ve been in touch with the MAS and how much revenue they’ve derived as a result?

    How will the creators of the MAS determine whether or not it’ll have been (our) money well spent? I rather suspect that isn’t part of the gameplan.

  18. Payday loan uk 22nd June 2011 at 1:03 pm

    The day will come soon when only IFA left.
    Payday loan uk

  19. Just been on the MAS website and it’s great.

    As a person who can’t afford an IFA it’s great to be able to get good advice and information for free without having to submit to the hard sell!

    I know it’s probably not popular with the IFA profession, especially as they have to fund it but MAS is going to be great for the vast majority of the public who will never go near or be able to afford an IFA

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