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MPs reveal Money Advice Service probe plans

The Treasury sub-committee’s inquiry into the Money Advice Service will investigate the salaries paid to its staff, how effective the service is and how appropriate it is that it is funded by the financial services industry.

The inquiry’s terms of reference, published today, say it will look at how effective the MAS’s expenditure on staff and other resources is, whether it is meeting its statutory objectives of enhancing the understanding and knowledge of members of the public of financial matters and the public’s ability to manage their own financial affairs as well as whether these are the right objectives for it to have.

It will also consider whether the service is suitably accountable and how its effectiveness can be assessed.

MAS chief executive Tony Hobman’s (pictured) £350,000 salary package has previously been criticised by the business innovation and skills select committee who 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.

Last September, the Advertising Standards Authority rejected adviser complaints over the MAS’s controversial TV ad which claimed it offers free, independent advice which was a “breath of fresh air”. In February, the FSA confirmed the MAS budget has doubled for 2012/13 to £87m.

In March, research by the MAS into its online healthchecks found that they are failing to deliver significant changes to consumer behaviour. It found that 300 out of 1,000 people surveyed could not remember taking the healthcheck with another 371 failing to do anything differently as a result.

Last month, Treasury financial secretary Mark Hoban rejected calls to amend the Financial Services Bill to force the MAS to focus on providing “targeted, proactive and easily accessible advice to those encountering economic disadvantage, financial exclusion or financial exploitation”.

The inquiry will also look at the extent to which services provided by the MAS are also provided by other organisations and how they compare. It will also ask whether the service should have a greater role in financial education in schools, something over 200 MPs, including committee member and Conservative MP Mark Garnier want to be made compulsory.

Money Marketing revealed the sub-committee was planning an inquiry into the MAS in March.



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There are 20 comments at the moment, we would love to hear your opinion too.

  1. this could be interesting, although the FSA will ignore any outcome!

  2. Soren Lorenson 2nd May 2012 at 10:41 am

    This folly should be closed immediately.

    And I should get my money back.

  3. Finally ! The people in Westmister are stirring. Let’s just hope they get their act togeter while there is still a financial services industry left to save.

  4. as a long term volunteer presenter,i would be happy to share my experiences with the Treasury sub-committee.How can an organisation that does not pay the majority of its front line(volunteers) people,demand a budget of 87million.

  5. Casual Observer 2nd May 2012 at 10:51 am

    No point making it compulsory at schools – previous attempts to implement financial awareness have failed with a lack of support from educators – mainly because they lack the knowledge and understanding themselves!

  6. My main bugbear is why does the MAS pay greatly inflated salaries for what is after all, a fairly ineffective website? The Pension Advisory Service is far more user friendly, costs a fraction of the MAS, and offers genuine help and guidence. As it’s funding is by a small grant from the DWP. If we need something like the MAS, why not set it up on the same basis, with the debt management companies giving pro bono help, as well as some chartered advisers? It will do no harm to the reputation of advisers, and may remind the debt management industry of it’s responsabilities.

  7. Rudolf Schnackenberg 2nd May 2012 at 11:17 am

    @Hikky: Were you away that day they did a lesson on apostrophes?

  8. May I remind you that IFAs gave this service FREE and on a face to face – one on one basis only to be forced to discontinue by the incomming RDR!

  9. Gerald Lambourne 2nd May 2012 at 11:38 am

    £350,000!!! How do they justify these ridiculous salaries? Is this person even qualified?

    And a budget of £87million pa – to achieve what exactly?

    I thought we were in times of austerity and reductions in public spending – except where jobs for the boys are concerned obviously!!

  10. The fact that there is an enquiry so soon after the MAS was set up clearly indicates that it wasn’t thought through in the first place. Anybody with an ounce of common sense in business knows that it costs a great deal of money to launch – and raise – the profile of a new service, and it was flawed from outset when it appears to be advising (advice is free remember….) people in debt whilst paying Hobson £350k pa.

    It would take hundreds of thousands of (our) pounds to raise the profile of the MAS to the profile of the already well-established Citizens Advice Bureau, so why did they not consider – if they ever need to do anything anyway – ploughing money into the CAB?.

    With these idiots having already wasted thousands on advertising the MAS, to prove my point – if you care to ‘google’ CAB it comes FIRST on the list of searches, yet if you google ‘MAS’ it doesn’t appear anywhere. What does appear before the Money Advice Service is ever mentioned, is 1) Malaysian Airlines 2) The Manufacturing Advisory Service 3) Monetary Authority of Singapore 4) Musicians Answering Service!.

    However, sadly, the enquiry will come and go; Hobman will still be paid handsomely, advice will still be peddled as free, IFAs will be still be shelling out, but most importantly, customers will still be in debt.

    Absolutely brilliant…..

  11. We really need to get to the core of the matter, which is…… which complete nincompoop signed off the grossly overinflated remuneration package?
    Once we have found them, sack them and publicly huimiliate them.

  12. 2nd May 2012 at 12:37 pm

    Whilst going into schools to is admirable. The government need to get reading, writing and maths up to an acceptable standard, otherwise they will not understand what they are being taught anyway.

  13. There is only one lesson to learn – “don’t spend what you don’t have”.

    Anything else will be outdated and irrelevant by the time the child leaves school given that the FSA and government can’t leave a single rule or regulation in place for more than 5 minutes before changing it.

  14. very true Bill, very true

  15. To Anonymous | 2 May 2012 11:28 am

    I find your comments a bit worrying as IFA’s have never provided a FREE service as our service is funded through commission or fixed fees.

    The reasons why RDR is having to be introduced is not only to raise standards but also to force advisers to declare what they actually earn. I’m still surprised at how many IFA’s or indeed bank advisers do not declare their commission levels. This is sometimes done deliberately by withholding the commission disclosure documentation, post RDR this will be impossible as clients will have to sign an adviser fee agreement.

    I don’t agree with the money advice service as I think it’s a waste of money and government should promote independent financial advice more but our own industry has to clean up its own game before we can lecture others.

    What also angers me about the money advice service is they don’t actually provide tailored individual advice so why are they called the money advice service. I also believe IFA’s should not be funding a government quango after all what is Corporation and income tax for.

  16. @ Peter Herd

    We do disclose what we earn via quotes and more importantly via the bloody RMAR pain in the arse which is probably why the FSA treat us like cash cows and refunding the FSCS debt.
    Its not forcing us to declare our income its forcing us out of business !!!!

  17. Larry in London 2nd May 2012 at 3:54 pm


  18. Michael Fallas 2nd May 2012 at 6:22 pm

    Shame they didn’t do all this before they set this service up and the fact it is unregulated and is not giving advice despite it’s name is just a complete folly that we all pay for.

    Thye don’t care and with supporters like Mark Hoban you have to question the sanity of those in power.

    The cost per person they deal with would be much better spend paying IFA’s to do the work if any such service needs to exist.

  19. MAS is just an expensive marketing campaign that is doomed to fail. Any information provided by the service is readily available with a quick Google search. Some people may see the adverts and have a look out of curiosity, but on the whole most will just carry on doing what they have always done which is nothing until it becomes a matter of urgency.

    I did have a look for myself on the MAS site and it told me that because I have no debts I should save more. Thank you MAS for that £87m worth of information.

    I predict before too long that MAS will fail to deliver and they will be come asking for more money to make it more effective because the amounts of money spent to date were clearly not enough.

    This does pose one important question, what is the benchmark for success and who determines this benchmark justifies the cost?

  20. Well I hope MPs do a better job than they did of the mauling they gave the FSA over RDR. Lots of embarrassment, Sants jumping before he was puched (I bet) and no difference to regulation.

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