The Tory economic manifesto, published last week, sets out proposals for a free impartial advice service via face-to-face sessions, phone and online advice.
Funding for the service would come from a new “social responsibility levy” on the financial services sector.
The Government is committed to launching a money guidance service by 2011, with a £20m rollout cost shared between the financial industry and the Government.
Personal Finance Society chief executive Fay Goddard says: “We have already done so much work and invested heavily in terms of how to improve financial capability and the development of money guidance. It would seem log- ical for the Tories to main- tain the existing momentum rather than trying to reinvent the wheel.
“If they do want to do something different, we would need to carefully consider the cost of the work, as well as what they mean by ’free impartial advice’ in terms of whether it fits in the regulated area or not.”
Institute of Financial Planning chief executive Nick Cann says: “It needs to be a little more thought out than just throwing an amount of money gathered from the wrong people. More creative ideas need to be thought out about how to connect with the consumer and give them the confidence and the appetite to take the next step.”
Evolve Financial Planning director Jason Witcombe says that an online decision-tree process would be effective and significantly more cost efficient. He says: “For most people, there are 10 very easy steps that make a very big difference to their finances, such as paying off high-interest credit cards and reducing debt.
“The vast majority of people only need a decision-tree approach, that could be delivered online, to cover fundamental financial management. This would significantly reduce the cost burden to the industry.”