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Money Advice Service is a good start for simplified advice

I am very relieved to see the launch of the Money Advice Service. It is the end-product or the latest product of the process that began with the Thoresen review and I know from remarks Otto Thoresen made at the Protection Review recently that he is very pleased to see the progress made.

It is vital that the public have access to simple, comprehensible and accurate advice. I think the penny has dropped on this one with the work by the Treasury on simplified products and the development of the website. Please check it out and see what you think.

Since the website went live, some people in the industry who understand protection well have contacted me to see what I think of it. My initial reaction is to give it somewhere between seven and eight out of 10.

I always have a dilemma when I am trying out websites. Should I register as myself with my pre-retirement issues or should I pretend to be the cash-strapped, downtrodden consumer with a large, young family and little idea of how to cope? The latter course is much more interesting and much more instructive and this is how I initially headed.

Criticising something as generally worthy as this site is a bit like complaining that you are taking an inferior type of bottled water to a disaster zone. In the greater scheme of things it does not really matter but I reserve the right to be picky.

I would like a greater emphasis on income protection. Here he goes again, I hear you say, but I make no apologies for pointing out that although the creation of an action plan is an excellent methodology, when you look at the advice for cash-strapped families there is little mention of IP in the action plan but lots on mobile phone insurance and identity theft insurance. An actuarial friend of mine pointed this out and he is right.

While I am at it, I think we should be looking at primacy of need when outlining protection cover. The list on insurance does not do this. In fact, in the section on insurance it goes straight on to motor insurance but when we come to personal protection it features critical illness first. Why? It is not an alphabetical list and it describes payment protection insurance without referring to the serious issues that have beset the product, although it does point out some of the potential pitfalls. Life insurance comes last in the list.

People need to be told what their priorities are. The first is normally to protect their key outgoings, not the payments on their i-Phone, and to ensure they protect their family against the consequences of premature death.

Nevertheless, this is much better than nothing and is an acknowledgement that most people need protection cover, not just an elite few. Let us hope we have enough companies left to sell it to them.

Peter Le Beau is managing director of Le Beau Visage

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Underwriter Support 23rd August 2011 at 2:07 pm

    Interesting article and fully justified criticisms in my view. The fact that the life cover – in the Service’s own words the simplest product – is at the bottom of the insurance list is frankly a basic flaw and one that needs correcting.

    Motor insurance being at the top is perhaps a reflection of it being the only compulsory insurance on the list, so therefore advice is more likely to be sought by the internet surfers out there.

  2. MAS is a statist bureaucratic central planning solution to a problem created by central planning bureaucratic statists. It will fail.

  3. How can Mr Le Beau give the web site 7 or 8 out of 10 but then go on to point out its potentially disastrous flaws – and they are disastrous.

    Moreover, Mr Le Beau makes the point that “people need to be told what there priorities are” whilst his article underlines that the MAS, if the order of presentation is anything to go by, gives a perverted and dangerous prioritization to products which most people could reasonably ignore altogether.

    The fact is that Mr Le Beau seems to be confusing this website as somewhere to go for ADVICE – and it isn’t !

  4. The problem is as with all internet propositions. It will take £millions and need repeated £millions with no relevant income stream for the general public to be aware of MAS.

    I hust put into Google the following, and no mention of MAS on the first page. However there was a number of commercial sites that MAS has to compete/ save the consumer from…..

    “Help with life assurance advice”

    “advice about life insurance”

    What a waste!!!!!!!!!!!!!!!

    As Steve Farrall commented:-

    MAS is a statist bureaucratic central planning solution to a problem created by central planning bureaucratic statists. It will fail.

    When measured against cost / benefit.

  5. Hands up all those who didn’t see this coming. My hand is staying down. Won’t be long before they are giving simple advice and charging for it.
    Just like someone pi**ing down your back and telling you it’s raining and you must buy their umbrella’s at what ever price they fix it to be. All in the comsumers best interests of course.

  6. Why do you say Money Advice Service is a good start for simplified advice when at the same time the regulators who introduced this service are destroying circa 25/30% of advisers, quite capable of delivering this same advice as they have done for years?

    Money Advice Service is a £42 million levy on the those advisers who remain and is a form of nationalisation of financial services, long sought by socialism. It would seem that British Leyland has taught us nothing in terms of the government interference in the free market. This is part of RDR and will turn UK Financial Services into the equivalent of Longbridge wasteland!

  7. “Criticising something as generally worthy as this site is a bit like complaining that you are taking an inferior type of bottled water to a disaster zone. ”

    I think people would be very much entitled to complain if you took your inferior bottled water to the disaster zone in cans marked “Petrol”.

  8. I think Peter has got it right. MAS is a very good starting place for the vast majority of consumers, most peoples financial affairs are pretty basic / simple.

    Yes there are some small issues but these can be ironed out.

    Why on earth this service is not funded by central government is a mystery. Why should IFAs pay for something which potentially could cost them business?

    The vast majority of people of people earning £30,000 pa or less will not pay IFA fees and probably don’t need to.

    Please stop slagging MAS off, give it the time to evolve into an important tool for the lower earning masses, people IFAs probably aren’t interested in.

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