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MPs to probe Money Advice Service effectiveness

The Treasury select sub-committee is launching an inquiry into the Money Advice Service which will look at its effectiveness and the salaries of its senior management.

This month, Money Marketing revealed one in three people who have taken the MAS online healthcheck did not remember doing so and MAS research suggests the healthcheck is not significantly changing consumers’ behaviour.

The business innovation and skills select committee called for an inquiry into MAS chief executive Tony Hobman’s (pictured) £350,000 remuneration package this month. Treasury financial secretary Mark Hoban has revealed over £100,000 was paid in bonuses to MAS senior staff in 2010/11.

The MAS is funded by a statutory industry levy, which is currently £43.7m, and promotes itself as providing “independent, unbiased advice”.

Speaking to Money Marketing, sub-committee chairman and Labour MP George Mudie says: “The MAS has a very important role to play but it costs a lot of money and we want to look at whether the service is focused enough. We will also be looking at the salaries of its senior management as a matter of course.”

Essential IFA managing director Peter Herd says: “The MAS has serious questions to answer about its role and the remuneration of its staff.”

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Comments

There are 21 comments at the moment, we would love to hear your opinion too.

  1. Why bother? We know the FSA takes not the blindest bit of notice of the TSC or anyone else for that matter. They are answerable to no-one and that is, I believe, a very dangerous and damaging situation for our Country and what was once a thriving profession

  2. They are only looking at the MAS – why???

    FSA, FOS and FSCS require a serious amount of time underthe microscope.

    Trouble is they never do anything significant.

  3. Another fine mess, courtesy of the Laurel and Hardy of the FSA. Messrs Sants and Nichol.

  4. Gobsmacked at the annual running cost.
    Make no mistake, we are being filleted and hung out to dry.
    Although the MP’s cannot DO anything about this appalling waste of money, at least they can ventillate the matter at hand and embarrass the pigs at the trough.

  5. Totally agree with the above comments, the FSA re out of control!

  6. The TSC has no teeth, Sants proved that and despite him being lambasted, nothing at the FSA has changed, they are still ploughing ahead with the most destructive changes to our industry ever conceived and use our money to fund ludicrous salaries for their staff and executives, salaries even our own estimed prime minister could never aspire to.

    We no long have government working for the benefit of the people, the recent debacle of how political parties are funded, demonstrates that at the highest level, their ability to relate to the public has all but disappeared.

    We have a financial services regulator which has for many years not been fit for purpose.

    A FOS system of complaint resolution which uses unqualified inadequate and ill prepared staff to assess claims against advisers and firms, who do not even possess or are required to possess any formal qualifications to do so, nor do they even have to possess basic knowledge of financial services, regulations and products in order to do their job.

    We have an FSCS open ended liability system which will in the final analysis if it is not changed to a product levy system will all but destroy the IFA sector within 2 yrs.

    There is also the matter of senior executives bailing out of the FSA before the Manure from the RDR hits the fan and who vehemently deny the reality of what they are doing to the detriment of consumers.

    Talk about shooting us with our own arrows, this lot has betrayed both the industry and the public and the whole edifice will collapse once it is realised how devastating to the industry these changes are.

    9 months to go before this idiotic, ill conceived RDR is put in to place.

    May the great architect of the universe help us, no one else will.

  7. How about investigateing how MAS fund A4E who are employing none qualified Advisors for face to face meetings with the public, and what advise they are giving. I note A4E have been running a trial for a number of months for the FSA/MAS and then they get the contract, whilst they are under investigation for alledged FRAUD.

  8. Old Chinese Proverb “Never send a turkey to check on a turkey”

  9. In my many years as an IFA, it’s been a central theme to ensure my clients are financially educated so they understand exactly what the products bought actually do. Also many other areas are highlighted to a level of basic understanding. Good, long-term relationships based on trust form a good basis for financial education not some tin pot halfhour online or telephone based service. MAS is a pointless waste of time, there to provide more financially inexperienced and under qualified quango ites the opportunity to earn a fortune on the back of another unacceptable and unjustifiable levy on the financial services industry. Shut it down and leave education to the people in the front line of the industry. Rant over…. For now….

  10. My concerns around The Money Advice Service centre on their pretence that they actually provide advice when in fact they only provide information. The industry has gone through the massive expense of up skilling advisers only to have our regulator introduce a service that pretends to give advice. The real joke about all of this is that we who work in the industry have to fund this service. I wouldn’t mind if The Money Advice Service actually promoted the services of independent financial advisers, but it doesn’t! I suspect somebody from the money advice service would say it does through its link to unbiased.com stuck on the back page of its website.

    Our regulator needs to start to listen and work with the industry and particularly promote the services of Independent Financial Advisers if it doesn’t they will not have anybody left in the industry to pay its fees. But maybe that’s their game plan only to have big banks and a few product providers left who can afford the extortionate fees.

    I also believe that our regulator needs to start clamping down on people offering advice services or indeed comparison sites without being registered with the FSA. I think it’s a cheek that many working as journalists can seem to operate and make profit with in our industry without being registered with the FSA. Hardly a day goes by when I don’t get a telephone call from a financial services leads producing firm that is often not even registered.

    A good example of this is well known TV money commentator that runs a well-known website which I believe very entertaining but he often comments on areas that he is not authorised to talk about. What is the point of introducing new exams and authorisation levels when somebody operating as a journalist can give his opinion on pensions in the mass media when he is not qualified to do so?

    We need to protect our trade and I would ask that the regulator confirms what advice actually means. I also feel is about time that the financial services marketing act was amended to tighten up in the area of journalistic reporting rights in respects to advertising and promoting. I have no problem in a journalist reporting on a story what I have a problem with is a journalist using these regulations to promote and advertise services that they are not authorised or regulated to do.

  11. I totally agree with the comments regarding the FSA and their sucessors, but let us herald little victories.
    MPs are elected by us, and need to be re-elected regularly. Their frustration when on committee becomes aparant when certain unelected apointees ignore their authority.
    The BIS committee have highlighted a concern to the TSC, who will make a formal inquiry into the MAS, and when their conclusion castigates the FSA over their profligacy, the FSA must respond. Luckily, Sants will not be there, and the mettle of his sucessors will be tested.
    Three cheers for the BIS committee for highlighting this waste.
    So, IFAs who have their MPs on the TSC need to e-mail them to make them aware of your fury over the waste of money on MAS, and the arrogant, unelected FSA powers that are wrecking our business and could lead to the rise of vertically intregated advice firms like SJP and Towry.
    The MPs are:
    Mr Andrew Tyrie (Chairman) Chichester
    Michael Fallon Sevenoaks
    Mark Garnier Wyre Forest
    Stewart Hosie Dundee East
    Andrea Leadsom South Northamptonshire
    Rt Hon Pat McFadden Wolverhampton South East
    Mr Andy Love Edmonton
    John Mann Bassetlaw
    Mr George Mudie Leeds East
    Jesse Norman Hereford and South Herefordshire
    Teresa Pearce Erith and Thamesmead
    Mr David Ruffley Bury St Edmunds
    John Thurso Caithness, Sutherland and Easter Ross
    So, E-mail them now.
    (Most MPs will not deal with E-mails from persons who do not live in their constituency).

  12. Just imagine the good that could be done with £43.7m. It is a staggering amount of money and yet it seems the majority of those who have used the MAS can’t even remember doing so!
    It is ridiculous that the regulator is so unaccountable. The FSA and MAS will almost certainly ignore the TSC, as they have in the past.
    We all know this is a waste of fees we pay towards, but then bizarrely we have no say in how the fees are spent.
    In today’s economic climate none of the FSA or MAS employees deserve expensive defined benefit pension but I bet they get them, and so it goes on and on with no likelhood of any common sense or logic prevailing.
    If regulation was more accountable i’d happily do my bit and do some pro bono work for those in debt to help where I could, but it is hard to feel enthused about helping out when a regulator and its various side shows behave with such arrogance, ignoring those who know better and have far more experience.
    It is similar to Boris and Ken (neither of whom drive) refusing to listen to the London Taxi Drivers Assoc on how to improve London’s roads.
    All so easy to improve with comon sense and accountability, but little evidence of either on the near horizon.

  13. Have you lot nothing better to do than read stories and respond by nursing the chip on your shoulder and create an atmosphere of self pity and victimisation. This is the first and last time I leave a note on this forum for the self pitying. IFAs always the victims? Have a thought for the clients too please.
    Some good and some bad in every walk of life.

  14. The MAS is a waste of time. IFAs provided free advice to all with the premise that they would do some business with someone and therefore earn a commission and an income. Yes it was cross subsidisation but it worked! Now everyone is levied and has to pay.

  15. Anon-y-mouse at 12 .25 After that comment I am really pleased you wont be commenting again, if you were subject to the abuse that IFA’s have suffered and paid for you would without doubt feel the same way, more important it has an effect on our long standing clients as we unfortunatly have to pass on the cost to them. The only people who win are the unaccountable F.pack. you are the weak link goodbye!

  16. Anonymous | 29 Mar 2012 12:25 pm

    What a terrible narrow view you have

  17. “The MAS has a very important role to play” – Really? Like what?

    First loss is the cheapest – GET RID OF IT!

  18. Sadly the TSC has proved they have no power over the FSA at all so not sure what the point of this will be either way, except a waste of tax payer money as until they do what they should do and get the power to make the FSA do what an elected Government wants them to do then this is pointless. Equally they should be investigating Mrak Hoban who defended the salary package of £350K of the top man running the Money Advice Service. They won’t of course. But they all have a bottomless pit of money (US) to fund their egos don’t they?

    All talk with no ability to change the situation if you ask me however well meaning it seems.

  19. Dear Anonymous@12.25.
    I am sorry that you should feel that it is time for you to emerge from your chrysalis.
    Winter is not yet over despite the sun.
    Wait a while until all the bad weather is over and you can emerge to a perfect world.
    Meantime carry on having your nightmares and we all hope for a speedy recovery!

  20. Dear Anonymous@12.25

    Misguided, misinformed, naive. I few adjectives that would suit your debut.

    Unfortunately, it is the clients that will suffer. Hope your not one of them.

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