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Money Advice Service moves to “advice-type” activity

The Money Advice Service says it is moving towards offering an “advice-type” service, rather than information and guidance only, but insists it will not enter the regulated advice space.

Speaking at the Marketforce conference on the future of distribution in financial services in London today, MAS policy lead Francis McGee said people are more aware of the need for financial advice in tough economic times, but it is difficult to convert that awareness into action.

McGee said: “Advice of all kinds can help with that. Advice is more directional, more assertive, more personal, than simply and solely information and education-type activity. Which is why at MAS we are moving very clearly from just doing information and education towards doing advice-type activity.”

Aviva RDR programme manager Ross Anderson questioned McGee on whether this signals that MAS is moving into regulated financial advice?

McGee said: “No”

Earlier this month, the MAS refused to answer questions about how much it is spending on redundancy packages, directors’ remuneration and overseas trips for senior management.

Money Marketing put a number of questions to chief executive Tony Hobman but the service refused to provide detailed answers.

Earlier this month, Money Marketing revealed that three-quarters of the MAS team of 150 have been put on consultation.

The majority of MAS staff moved across from the FSA’s Consumer Financial Education Body when it became the MAS in April.

An MAS spokeswoman has confirmed that all staff who moved across from the FSA are entitled to “a comprehensive redundancy” package, as set out in the FSA’s employee handbook. The handbook states the maximum payment allowed is the greater of one year’s salary or £100,000.

The MAS is funded by a statutory industry levy. It has a budget of £43.7m for 2011/12, which includes £13.5m for staff costs.

Last week, Money Marketing revealed that MAS spent more than £250,000 rebranding the Money Made Clear and Consumer Financial Education Body websites before its launch in April.


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There are 47 comments at the moment, we would love to hear your opinion too.

  1. I’d like to offer an “advice-type” service that isn’t regulated. Is there a form ?

  2. So am I and all of the other hard working, regulated, fee paying IFA’s going to have to continue to fund this new competitor’s business model, fat salaries, bonuses, pensions….
    You honestly could not make this up!

  3. Well, can the Office of Fair Trading now help us then?

    We in the industry are required to fund MAS – which is now stating they will be competing against us (as we could charge a client a fee for ‘non-regulated advice’, which MAS appears to want to offer free, they are in direct competition with the advice industry).

    It seems MAS have an unfair advantage – which is very much anti-competitive!!!!

  4. Just fell off the chair laughing. ‘Advice type’ advice from an organisation with Advice in it’s title. But it’s not advice, let’s be clear about that. Unreal. You really couldn’t make this stuff up.

  5. That should clear up any confusion that consumers had over the Money “Advice” Service that didn’t give advice, only information and guidance, and now gives an advice-type service, but not proper regulated advice!

    Brilliant, what a joke!!

  6. Are they taking the mick, we are paying for this!!!
    Perhaps they can pay me some money so that I can offer my client advice!

  7. I’d like to offer an “advice-type” service that isnt regulated and paid for by others who are is what you really mean!

  8. This is the ‘thin edge of the wedge’ – how great it is to think that I am funding (as an IFA) a competitor to my own business!

    I would say that TO BE HONEST I’m being TOTALLY shafted by both the FSA & THIS LOT IN FEES!

    What a stitch up!

    If anybody who was totally impartial to the Financial Services Industry could see what was going on – they would laugh uncontrollably at how Regulation was not so blatently biased & against IFA’S!

    God help us!

  9. “advice type service”

    Isn’t this just an admission that the guidance only approach didn’t have any appreciable effect!

    What does advice like service mean unless it is advice.

    If it is personal, directional and assertive then that sounds like sales to me. To be directional you need to recommend something. How can this be unregulated.

    Very very confused!!

    Perhaps it would be best and just admit the MAS service was a bad idea, quietly sweep it under the carpet, and save the industry millions of pounds of levy.

  10. My clients pay me to provide them with advice. They are also aware that a part of their fees cover our regulatory costs and our share of the costs of the FSCS. What I have not been discussing with them is that they are also funding the MAS.

    I need to do some research on this to be sure but I would suspect that they would generally be more than happy to help fund financial education. They would, however, probably be appalled to hear that some of their fees are potentially being used to fund advice for their next door neighbour!!

    I, like many of my peers, do provide our time regularly on a pro-bono basis. Also, we never tell a client that they cannot afford us and regularly do price work well below our tariff rates to support those individuals who need help.

    It would be really interesting to understand whom they are employing to provide this advice, what qualifications they have, how they are paid and, if unregulated, who monitors and polices this advice.

  11. So the question becomes:

    When is “advice” not advice as per the FSA’s definition?

    Could the answer possibly be ‘When it suits the FSA and puts another nail in the coffin of those pesky, small independents?”

  12. What concerns me most is that “Money Marketing put a number of questions to Chief Executive Tony Hobman but the service refused to provide detailed answers”

    Why not?

    What were the questions Money Marketing posed?

    As I and the other readers of Money Marketing are paying for this “service” (and thus his salary) and he therefore works for us tell him he has no choice and that we all require the answers immediately

  13. David, I stand corrected (anon 2.45 here), I hadn’t even spotted that I could get someone else to pay for my business as well. There is a future for us after all !

  14. Me TOO! I wanna get my nose in the trough! I want to get paid by someone else to give non regulated ‘advice type’. How? What? Where!?When? HOW MUCH?

  15. I would also like to offer an “advice-type” service that is independent unbiased and isn’t regulated. Where do I get the application form? do I qualify for the company pension scheme, funded by the taxpayer, the overseas trips, lavish Christmas party and plush city offices?. I need to put by resignation to the FSA before 31 December, so if anyone knows how to board this new gravy train, please let us all know.

  16. The blind leading the blind.

    Welcome to the 21st century regulation. And all this to protect the end consumer and promote confidence in financial advice. They could not paint a more messy confusing picture for the poor client. The term p***up and brewery spring to mind!

    Never mind back to work, afterall someone has keep the economy going, pay our taxes, create jobs and feed all the leeches and free loaders

  17. Terence P.O'Halloran 1st December 2011 at 3:19 pm

    And they have the timerity to call IFAs ‘chancers’.

  18. The answer to who they are employing is on A4E website. looks like Emma Harrison is making a few more million at our expense. £20k plus pension and benifits for none qualified advisers! all for the Common purpose..

  19. Perhaps Francis McGee should refer to the FSA rules on advice and promotion.
    Any discussion with any client with a view to that client taking action on something becomes a financial promotion.
    Lots of people recently have discovered this fact in their conversations with FSA over UCIS products.
    Any financial promotion, wether it is for a regulated product or not, then becomes a regulated activity.

  20. 23 years in the industry and really enjoyed 20 of them making lots of good friends in the process – the last 2-3 years with all the dross the FSA churns out and then this sort of thing makes me think it’s time to hang up me boots and find something less annoying than putting up with this sort of drivel day in day out!

    Probably the same thing many other IFA’s in a similar position feel.

    What quali’s will these “advisers” have? CSE Woodwork and a City & Guilds in Origami – should be sufficient given that they won’t be giving advice but will just be “guiding” people in the right direction!

    Either way I’m sure they won’t need PI at significant cost nor pay vast sums into FOS and FSCS nor FSA fees…………………………….

    I’ve bored myself to tears……………..

  21. Guess i will be going down the “Advice Type” route as opposed to the RDR route.

  22. Greg | 1 Dec 2011 3:13 pm

    The blind leading the blind.

    No Greg they know exactly what they are doing telling us to fund A4e Action for employment ifrom Sheffield, thay are advertising for these (Advisors) look it up!

  23. So another definition to contend with!
    -Advice Type
    -Non advice
    And the general public is meant to understand this as well as us? Staggering….

  24. I wonder if the plan is that MAS will try to bridge the gap between seeking “information” & “action” to implement a product.

    If so and MAS do not sell the product then surely the MAS will be helping the adviser community as we will have more clients wanting to implement products (having been converted from enquirers to buyers by MAS)?

    In my firm charge for giving advice not for selling a product but we advise clients who are in the top 10% of UK earners. I can’t see my client group going to MAS for informaion in the first place so therefore i can not see this as a threat to our business.

    However, the average UK worker earns around £25000 a year and a recent survey said only 29% are confident about saving in a pension. This probably indicates that this group of the population has little or no savings and frankly are unlikely to find it any easier to save in the future than they have in the past. If this group fails to save for their future it will have a massive impact on future demands on the state coffers.

    So if MAS position themselves in such a way that they are sucessful in converting some of these people into savers and direct them to IFA’s who operate in this client group to buy a product then that has got to be a good thing, hasn’t it?

    We will have to wait to see if MAS is so well intentioned or not….

  25. Can we take qualification-type exams, take out PI- type insurance, pay FSA – type fees and provide and advice- like service?

  26. So if I understand this correctly, the regulated advisory community pay fees to fund a ‘non regulated’ advisory service and at the same time not only fund the set up of the operation body but also the redundancy packages of employees they don’t want anymore because their business plan was flawed in the first place. Sounds very fair – NOT. I also wonder who will fund the compensation claims that will undoubtedly follow. I do not expect it will fall on the individual MAS employees but rather the FSA and where do they get their money – US!! Has anyone answered this yet?

    When will the FSA stop wasting the fees we work so hard to pay them. This is typical of a corporate body, because it is not their own money they are reckless when they spend it.

  27. Elaine, you are being extremely naive and completely missing the point here. It’s the sheer duplicity, extraordinary arrogance that they can basically do what they want while the rest of us have to play by the FSA’s ill-thought out, biased rules which are frankly ‘Alice in Wonderland’ in comparison to every other profession in this country. I am sure that you mainly deal with the top 10% affluent clients and your eggs are all double yokers, but you are still paying for this dross!

  28. Therefore, rather than being the Money Advice service, MAS will become the Money Advice Type service? Confused? you will be.
    A cunning plan methinks.
    How much will the rebranding cost?

  29. Another load of bovine extruded material dropped in the lap of business by overpaid government nitwits.

  30. @Anonymous. Its nice to be called naive as it makes me feel young again!

    But we won’t know the truth about MAS’ intentions until they are published. This story is very short on detail (probably because McGee was vague & possibly caught on the hop).

  31. “a comprehensive redundancy” package, as set out in the FSA’s employee handbook. The handbook states the maximum payment allowed is the greater of one year’s salary or £100,000.

    GREATER, is this a typo? if no,t I’m going apply for one of their ‘advice-type’ adviser jobs

  32. If the service is going to be one of my firm compatitor then can I opt out of the fees that I pay to fund it!!!!

  33. Elaine Birch
    Elaine you say if MAS directs clients to IFAs?
    MAS doesn’t even mention that we fund them so there seems little chance of that. What bother ME most about MAS is that they seem to think that they are protecting the public from US.

  34. Just a thought, will this new independent unbiased and unregulated advise rely on any information from the providers of financial products in the UK? And if they do and the product is not what is says it is, will we see a change in who is deemed responsible? I think we will.

  35. Our clients are by LAW being forced to pay (via us) for service to people who have not paid who use the MAS.
    People in the building which I work had to leave work (at risk of lossing their jobs) to go home and look after their children (who by law cannot be left alone) whilst someone else who we are forced to pay by LAW to teach them went on strike.
    My children are grown up and hence I was still at work, but had to call the Police (non emergency) 3 times because teh children who were NOT at school were doing par cour all over the rooves of our buildings.
    I am starting to wonder whether we are staring anarchy in the face due to the lunacy from on high.

  36. OK let’s just take stock

    MAS does not provide free independent advice but just advice which is independent for free?

    The FSA determines what is or isn’t advice, or independent and also that advice isn’t free and cannot be.

    So MAS offers free independent advice except it isn’t advice or independent or free

    Now MAS will offer ‘advice type activity’. Will this be advice, free or independent?

    Anyway don’t worry about all this because RDR will make it all clear when advisers (i.e. those providing advice) will be independent or restricted but it won’t be free and it might be independent or tied.

    Free independent advice type activity advice will however be available via MAS which isn’t regulated and presumably be provided by those with an O level in metalwork.

    Ha, ha, ha, ha , ha. Sorry that isn’t a regulated joke but a free comedic activity, paid for by regular comedians who have to satisfy stringent requirements as to what is funny.

    My sides are splitting!

  37. And who pays the FSCS levy when the claims come pouring in? It might not be regulated but compensation will have to come from somewhere!

  38. Re -MAS – Will this organisation get automatic approval for its advice services without all advising staff having to attain QCF Level 4 ?

    If we are to believe Mr Sants and Co that the imposition of QCF Level 4 on all advisers is legal and that if not achieved will result in de-authorisation, how is this going to be achieved prior to 2012.

    The most sensible thing to do is to close it down and refund our ill spent fees.

  39. Nick Bamford raises an interesting point. Why won’t the MAS provide answers to these questions? Yet another example of the FSA’s claim on its website to being “an open and transparent regulator” being complete hogwash. It isn’t.

  40. @snooks the MAS website has a button “how are we funded” that leads to this statement:-

    How we are funded

    The Financial Services Act 2010 requires us to consult on our budget each year with HM Treasury, the Office of Fair Trading, and the Department for Business, Innovation and Skills. After this consultation, we must have our budget approved formally by the Financial Services Authority.

    In 2011/12 we will receive £43.7 million in funding from fees raised from financial services firms regulated by the FSA under the Financial Services and Markets Act 2000.

    The general thread of the comments posted here is a concern that the agenda of MAS is to destroy the IFA community but their aims are stated thus:-

    Our strategy

    “To enhance people’s lives because they take control of their money as a matter of course.”

    We will do this by:

    Encouraging everyone to manage money well

    We plan to make a real impact on people’s behaviour and on society as a result.

    Achieving greater leverage from our work

    We will do this by working with and influencing the financial services industry, and regulatory and public policy agendas.

    Operating effectively and authoritatively

    We will do this by being an efficient, well-run and continually-improving organisation with the right values, skills, competencies and resources to succeed in the task.

    Find out more in our 2011/12 Business Plan

    So there would need to be a big change in their mandate if they were truly seeking to close down all IFA practices. Don’t get me wrong. I am not trying to defend the MAS… just keeping an open mind until there is hard evidence to the contrary.

  41. @Elaine

    As I’ve mentioned, and many others on these comments, the confusion caused by this organisation for consumers must be immense and the fact it is paid for by us regulated firms, despicable, but I do agree that they do not really pose any risk to IFAs, whether we will gain from it, personally I doubt.

    a4e, that is providing the face to face service, is an organisation that helps those out of work, and as I understand it, those that have been out of work and claiming jobs seekers allowance for at least 6 months, to gain employment.

    With this link with the MAS, they will be able to put an ‘adviser’ in to a local employer to provide basic information to their staff and in return they would hope to be able to place some new members of staff, and earn from the placements.

    For a4e it is another way of getting in to employers, for the government it is a way of getting people of of JSA and for the FSA it is a way of providing basic financial information to those that need it most.

    I would envisage that this ‘advice’ is going to mainly be; how to open a bank account, set up direct debits and maybe go as far as you should save for your future/retirement etc… but there wouldn’t actually be much in the way of product specific discussion. Whether or not this still constitutes financial promotion, I am unsure.

    The online and over the phone ‘advice’ that is provided by MAS, would sound exactly the same as previously provided by CAB, which I don’t think would have taken any business away from IFA’s – in fact I’ve had some advice from them (indirectly), unfortunately, mainly having to correct the information they’ve given, but heh-ho.

  42. I am inclined to agree with Mark, I don’t really (even with all my moaning) view it as a threat. BUT, that does not get away from the fact that this is NOT a clear fair and NOT misleading title and “advice type” is even worse.
    For those who worry about them overstepping the mark, then the FSA require stockborkers to record all phone calls so it would be very simple to reequire the MAS to do the same. As a reminder as to regulated activities, here is the link to the relevant section of the FSA website.

    Do I need to be authorised?

  43. No big surprise.

    Wonder why they don’t want to be regulated?

    Either way it is a disgrace and just futher cements the idea that Mark Hoban and the FSA are keen to promote “simple products” whatever they may be which do not need any advice.

    I just hope they can be personally held accountable if it does not achieve the desired objective, but that is probably like wishing we had a “domecracy” and our MP’s and regulators can be help responsible for their mistakes.

    Oh I dream!!.

  44. Have not read all the comments but here we go.

    Simple really – every IFA, product provider, Lender, Investment house – indeed all of us.

    Let’s just turn around ( all at the same time) and refuse to be FSA regulated.

    You’ve got it – go on strike – don’t pay their fees – don’t even listen to them.

    This will remove their authority. Because (speaking as an IFA) do you think our clients will desert us??

    Remove FSA authority and we will remove them.

    C’mon AIFA any Gonad’s out there then.

  45. Because “The majority of MAS staff moved across from the FSA’s Consumer Financial Education Body when it became the MAS in April”
    This means these staff are entitled to continious terms…meaning WE PAY for ALL their redundency packages upto £100000, and NOT for their time at MAS.

  46. If you can’t beat them join !!

    I’m an ex ifa gone private banker life is definitely more certain and brighter I’d definitely recommend it

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