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Money Advice Service levies could soar due to new role

The Money Advice Service is to take over responsibility for the coordination of debt advice in a move which could see the industry levies funding the service rise by 61 per cent.

Speaking at an evidence session before the joint committee on the draft Financial Services Bill this morning, MAS chief executive Tony Hobman said MAS’s current budget is £43.7m but that other possible costs are “on the horizon”.

He said: “The Government has asked that we take over coordination of debt advice. Currently the face to face contracts that are run by the Department for Business, Innovation and Skills, through Citizens Advice are in the order of £27m.”

Under the Financial Services and Market Act 2000, MAS is fully funded through an industry levy. An MAS spokeswoman says decisions have not yet been taken over how the new role will be funded. This could also include a levy by the Office of Fair Trading on consumer credit licensees or by a transfer of the BIS budget. Funding the new role by redirecting the BIS budget would require a change in legislation.

Hobman told the committee: “I think we can get a lot more bang for our buck by being smarter about how we do things.”

MAS has also been asked to research and develop a delivery model for debt advice. It will take responsibility for the new role from April 2012.

The move was first announced by BIS in July after a consultation into debt advice and personal insolvency. But Hobman told the committee he would like there to be a further consultation focused exclusively on the new role going to MAS.

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Comments

There are 18 comments at the moment, we would love to hear your opinion too.

  1. So yet more money to a service that seem to be set up to put the fee paying company out of business.

    Can the last person out please turn out the lights as we need to think about the environment lol

  2. This is starting to look like an open ended cheque book for any bright idea the government or FSA have.

  3. We have no say at all in these hair brained schemes that the FSA dream up…they are completely clueless…..but they are happy to have subsidised gyms/restaurants etc in their ivory towers.

    Its easy to spend someone elses hard earnt money..especially when they cant quiz you about it….disgracefull

  4. That should be a levy funded by the credit card and loan companies, not the part of the industry where we are encouraging people to be responsible and save.

  5. Don’t worry guys – the MAS is FREE!

    It said so on the telly and when I complained to the ASA they wrote me a nice letter back saying I was wrong to say it wasn’t free.

    So, all this talk of a levy is nonsense and after all, they will charge any extra levy for this advice to the debt chasers. You know, the ones that advertise on the telly and take a vast amount of repayments from the debt ridden before it gets to their creditors. And, despite most IVAs failing within 2 years they often take 100% of the first 2 years payments.

  6. Hobman told the committee: “I think we can get a lot more bang for our buck by being smarter about how we do things”
    Pull the other one.
    This is just the government shoving what should be a taxpayer funded arrangement on to the wealth creators for the good of the parasites.
    I am an IFA and I am out of here!

  7. Maybe we should put unemployment benefits through a financial service company levy as well, that could help the governments deficit…..

  8. “a lot more bang for our buck” its IFA’s buck’s that are paying for this……….it should be funded by the “debt” industry not the Advice industry and when our numbers have dropped by 40% will that mean the remaining IFA’s will have to pick up the shortfall?

  9. Hobman told the committee: “I think we can get a lot more bang for our buck by being smarter about how we do things.”

    Does this mean we pay for his firework party:)

    Surely it is the responsibility of lenders to help people who are in financial problems , not financial advisors again!!!!!

  10. Mark Hoban get a brain please and understand that we have not got a bottomless pit of money, you will finish up with nothing if you continue to put us out of business.. as IFA’s we allready help clients with debt problems … normally a free service, unlike MAS.

  11. So, the fat pig has its snout in the trough already.

    If only it was swill that we needed to feed it, rather than our hard earned cash; l we could redirect the swill poured over us by the FSA and send it round to the MAS.

    Will it never end?….

    err, don’t bother answering that question, I already know the answer.

  12. Extort more money from IFAs’
    ” hows that for a breath of fresh air”?

  13. So if its ‘free’ they won’t mind if I ignore any requests to pay for it then…..?

  14. “I think we can get a lot more bang for our buck by being smarter about how we do things.”

    Mr Holbon this takes Talent.

    I would like to take on this role at the FSA. I would commit to delivering this additional requirement of debt advice, reducing verified consumer detriment by any current target set by the FSA and reduce the current budget cost of the FSA by minimum 20%.

    I would enhance the objective consumer outcomes of the RDR while cutting the implementation cost of £1.7 billion by 75%. Guaranteed.

    Now this is what is meant by “getting more bang for your bucks” outside a self serving civil service budget driven mentality.

  15. . Delivering good quality debt advice will also benefit financial services firms, who will now take over responsibility for funding the service from taxpayers.”
    Quote from Mark Hoban last July on the MAS website. Good socialist government minister – he has already made up his mind.

  16. MAS told the ASA that they are independent and NEVER recommend individual firms. It’s why the IFAs complaint was not upheld and the MAS statements are in the adjudication.The reality is MAS recommends CCCS and Payplan on their site and actually include a link. I think the IFAs should appeal.

  17. Shouldn’t that be “More bang for IFAs’ bucks?”, or is it one of those riddles where the answer is that they should be shot and something which rhymes with buck?

  18. Why cannot MAS simply say ‘free advice , paid for by your local IFA’. None of these organisations seem capable of straight talking or giving credit where credit is due. Perhaps they think it would detract from the holier than thou attitude that runs through all their marketing.

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