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Money Advice Service set for pay changes following MP pressure

The Money Advice Service is planning to make changes to staff remuneration packages following criticism of its chief executive’s £350,000 pay package, Money Marketing understands.

MAS chief executive Tony Hobman receives a base salary of £250,000 plus benefits.

Earlier this month, the Treasury select sub-committee announced an inquiry into the MAS which will consider staff expenditure.

In March, Hobman’s salary package was criticised by the business innovation and skills select committee which called on the Government to raise the issue with the FSA as a matter of urgency. The committee said Hobman’s remuneration could be seen as “extravagant” adding it “does not sit easily” in an organisation tasked with helping those in debt.

Asked by the committee last December about his remuneration, Hobman said it means he is “hugely incentivised” in the role.

A source close to the situation says: “The service is considering changes to remuneration that are likely to be announced in the next month or so.”

An MAS spokeswoman says: “Remuneration is kept under constant review by our remuneration committee and is discussed as a matter of course.”

Access Wealth Management financial planner Jim Clancy says: “I cannot see how Hobman can justify that salary.”

Money Marketing first revealed the Treasury select sub-committee was planning an inquiry in March.



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There are 13 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 10th May 2012 at 10:25 am

    Not only are several salaries for MAS people way over the top, but the legitimacy and effectiveness of the entire enterprise are highly questionable.

    For a start, the MAS was launched by the FSA with no industry consultation (not that, on the strength of past FSA consultations, it would have made any difference anyway).

    Additionally, the MAS has already had to admit it has twice as many staff as it actually needs, not to mention having blown £4m on as completely ineffective consumer awareness campaign. So what has it done? Doubled its budget to cover the costs of advising people on debt issues, to be funded by an industry whose primary purpose is to help people protect and to accumulate wealth.

    It might just about be acceptable if the costs of that element of the MAS’ activities were funded solely by institutions that lend money, particularly on an unsecured basis (credit and store cards surely represent the biggest areas of excessive personal debt). But why should the rest of us have a fourth tier added to our regulatory costs, which are already way out of control, not least because the FSA is free to set its own budget without reference to anyone but its own board, a situation that the present government has already declared will continue after the partitioning of the FSA.

    It’s all totally wrong, just an open charter for abuse of power at other peoples’ expense.

  2. So a guy tasked with helping people in financial difficuly need a pile of money to be incentivised?

    Snouts in the trough.

  3. Derek Bradley ceo 10th May 2012 at 10:46 am

    “Asked by the committee last December about his remuneration, Hobman said it means he is “hugely incentivised” in the role”.

    What exactly is the MAS set up to do? Type “MAS” into a Google search and it does not even show up in the search engine until page 4. A bit of SEO optimization stuff to do too I think!

    The MAS board states it’s mission as “to provide leadership and strategic direction, define control mechanisms and supervise the overall management of our activities”.

    It goes on to say: “Our advice and information is available online, over the phone and face to face. We provide tailored money advice to help you make choices throughout your life, whatever your circumstances. 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”.

    Well for inspirational mission statements that is top-drawer stuff, but that is where it starts and ends. Now you will be very aware that in 2011/12 the MAS will receive funding of £43.7 million rising to £86.8m in 2012/13 from fees raised from financial services firms regulated by the FSA under FSMA 2000, so you would expect top quality engagement when you call them?

    To test the MAS RDR readiness to, at the very least, have informed dialogue with those concerned consumers calling them to get clarification that what their IFA had told them about post RDR advice charging was correct, we conducted a “mystery shopper” exercise on the 14th March.

    You can read about the outcome via this link-

    If I may borrow a line from the great Blackadder, “It started badly, it tailed off a little in the middle and the less said about the end the better, but apart from that it was excellent”.

    We have some 234 days to go, the FSA have no RDR awareness creation policy or plans of any substance, Sants has resigned, Cole has resigned, Smith has resigned and there is probably no budget as that will have gone on Hobman’s salary.

    It seems according to Jeff Prestridge that the MAS offices have been “occupied by a coop of headless chickens. No one quite knows what they are doing”.

    He is right. Well done TSC. But how did it get to this in the first place?

  4. Payment by results is the answer: Question; how many people actually visit their website (pretty confusing for the regular guy when you drill down for product comparison detail). How many of them actually go through to the MAS comparison tables? And, in turn, how many of those for (lets say) PPI for example, click on a link that takes them to the product provider? This is the only measure to really judge if the MAS website was useful or just on-line wallpaper. It would be proof the site has actually served the customer.

    We providers spend a lot of resource feeding complex info to the MAS to update their tables – every rate change/new product spec etc. As an industry we should demand to know if we are contributing something useful/valuable to the public. If not, then not only is the CEO overpaid, it also brings into question the value of the MAS in totality.

    If my stats from Google are indicative of others experience, the MAS, has minimal through traffic and little credibility with the general public.

  5. Michael Fallas 10th May 2012 at 10:54 am

    Let’s not forget the MAS is not even regulated by the FSA. and take no responsibility for any advice it gives !!

    It is a utter disgrace and does little to give consumers or those who pay for it any confidence in what it does.

    It is called an “advice” service, yet does not give advice but gives guidance, it is not responsible for it’s advice or guidance and is not regulated by the FSA, and it costs one hell of a lot of money per consumer that uses it.

    Perhpas someone can tell me why a service set up by the FSA or with their help is not regulated by thre FSA?

    You really have to aks if it is just me who is insane or those that govern and regulate us are!!

  6. Exasperated Me 10th May 2012 at 10:56 am

    Regulation is a busted flush

  7. So!

    How many contributors to this blog have actually raised any concerns in writing to their MP, FSA and TSC

    I have, have you?

    If not, stop whingeing and register your protests.

    IFAs are notorious for criticising the establishment, but very slow to actually put their concerns in writing.

    THAT is why they can do what they want, no one raises objections in writing in case they get a visit from the Financial Stitchup Authority.

    Be afraid was Hectors retoric, be not afraid, be bold and mighty forces shall accompany thee.

  8. Mr Hobman’s incentive, like many of the other well known snufflers is to maintain his current position until somehting more advantageous comes along.

    Waving the consumer flag and spending lashings of other peoples money is the current vogue amongst the unaccountable and the sooner it stops the better.

    Our problem is that the Government has no appetite to rock the boat when it receives little column inches and fails to register any voting problems.

  9. Some time ago many IFAs including myself were trained at the FSA to give presentations to corporate clients to help guide them in money matters. This was voluntary! The MAS is using huge amounts of our money to fund this project and pay rather large salaries (incentivised or not) and not even pay the expences of IFAs to present money matters.
    Who are the mugs? Typical manipulation from a body that reports to no one, makes up their own rules, makes huge mistakes and passes the cost on to the IFA…….????

  10. FSA, MAS and my local council are all at it paying higher salaries than the prime minster its about time someone stop them taking the p*** with our money.

  11. @Ned 11.04am
    Of course youre right that more IFAs should focus their criticisms (and positive suggestions just as importantly) in the right direction. However, in the last 3 years I have spent valuable business time writing once or more to my own MP, the Treasury, the TSC and its MPs, and of course the FSA direct. I have had answers from TSC and members, my own MP, Hector Sants, Martin Wheatly, among others. Replies tended to have in common predictable political skills and deflection techniques, but (imho) were devoid of practical progress, actions or solution conscious thinking. I may be being harsh and I probably have an overly expectant nature, but it seemed to me that what seemed to matter most was the fact of replying, rather than grasping and practically solving the issues.
    The point being, one eventually loses faith in a certain approach when it seems repeatedly to achieve nothing.

  12. To Ned Naylor

    You are completely right we should write to the FCA and our own MPs more regularly and I would encourage all on this site do so.

    It is disappointing however the responses we get back my own MP Dr Danial Pouter was terrible when we raised a few queries with him.

    We desperately need a organisation that can campaign en masse unfortunately this always tends to be fragmented.

  13. My MP has been pretty good about the whole FSA issue. She seemed to be pretty aware of Arch Cru (despite the fact I had no affected clients), but didn’t know about Keydata until I told her about that and MAS.
    Like Ken Bannister commenetd earlier, I looked at helping with information for employers on a voluntary basis, but 1. I am not one for sticking to the party line, so couldn’t stick to a script and 2. I don’t see why someone should get paid £350k while I do something for free.
    I suggested to CFEB they should give advisers the choice, an hours free work at the CFEB (now MAS)or pay a levy……, but they still want the money.

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