You may find this hard to believe, but some time ago I promised myself I would never again write about the Money Advice Service. My reasoning was I had said everything there was to say on the subject.
After all, over the past four or five years I had already extensively described an organisation which, certainly at launch and for years afterwards, hugely overpaid its senior executives. It also behaved like it owned a printing press when it came to publicising its own vastly inadequate service to consumers.
In the wake of Chancellor George Osborne’s Budget announcement that the MAS is to be scrapped, I did ask myself: is it worth going over the same old ground all over again?
After all, if it is rarely the done thing to kick a man when he is down, it is even less acceptable to do it to a corpse. Or a corpse-to-be at any rate.
Yet the two articles discussing the MAS in last week’s Money Marketing, by Investment Quorum chief executive Lee Robertson and Technology and Technical managing director Kim North both make important arguments about the service.
More significantly, both Robertson and North point to a critical issue: there remains a vacuum that needs filling by an organisation that can help with the vast majority of the UK population’s need for financial “guidance”, “support”, “advice” – call it what you will.
It will inevitably come out of the ashes of the MAS, as well as the The Pensions Advisory Service and Pension Wise. And, though they do not say so themselves, it will need to be funded in some way – and some form of combined industry levy and government grant is probably the only way that can happen.
Which makes it important to learn the lessons of what went wrong at the MAS.
One of the key challenges it faced was that the MAS tried to operate at arms’ length from the industry, regulators and politicians. While this level of independence was right on the whole, it could have benefited from a less naïve relationship with all three.
Ironically, the two issues that particularly galvanised advisers against the MAS – its claim to offer “independent advice” and comments by its chief executive Caroline Rookes that she was “concerned about the ethics of advisers” – were probably the least important.
Yes, when I first watched the MAS adverts on TV five years ago, I was dumbfounded.
As for Rookes’s comments at a Labour party fringe meeting back in September 2014, it is important to remember the context in which they were being made. She was asked: “Caroline… if you say there is a need for more regulated financial advice then I guess you are not concerned about the number of advisers or their ethics?”
What Rookes then did was to express views commonly held by politicians, regulators, consumer organisations about the activities – and therefore the ethics – of some advisers.
Neither her comments at Labour’s fringe meeting nor the claim to offer “independent and unbiased advice” would have mattered if the quality of that “advice” had been excellent. Sadly, it was not.
I remember visiting the website shortly after launch. My memory was it offered a combination of useful guidance, coupled with some quite bizarre and potentially harmful commentary.
The tone of its content was dry and unappealing. I described the experience as being like tumbleweed blowing through a deserted Wild West mining town, especially when compared to vibrant alternatives such as MoneySavingExpert.
It was at this point that the disparity between what all of us could see happening on its website and the increasingly grandiose claims about the effectiveness of its work really began to jar.
In fact, the MAS’s key failing was while burning its way through hundreds of millions of pounds during its five-year life, it was implausibly claiming that vast swathes of the UK population were being galvanised into action over their finances. Yet it offered no credible metrics for its claims.
Ironically, insofar as the MAS was able to trumpet any genuine successes, these came out of the unstinting and dedicated work of hundreds of local Citizens Advice bureaux, who at one point received less for their vital efforts than was being spent on the funding organisation’s marketing budget.
Assuming a new organisation rises, phoenix-like, from the debris of the old, what should it be like? It is becoming clearer that its focus needs to be less on empty web-based “journeys” and more on tangible help at the coalface of debt advice. It also needs to work far more closely with organisations like the Personal Finance Education Group, delivering support for financial education in classrooms.
While retaining that arms’ length relationship with the industry, it should aim to respond to and harness the knowledge and experience of thousands of advisers who actually spend all day helping consumers – their clients – reach their financial goals.
There is a role there for an organisation that can deliver meaningful financial guidance to millions of consumers. While we may not want to talk about the MAS any longer, we should definitely be discussing its replacement.