Profile: Martin Lewis on MAS, regulation and being advisers’ Beelzebub

Spend five minutes with Martin Lewis and you believe him when he says he is an insomniac who struggles to switch off. He speaks as though he is trying to break speed-talking records, rattling off opinions on pretty much everything, from the ills of the Money Advice Service to how the advice industry should rebrand itself.

Such is his energy, you begin to understand how he turned Moneysavingexpert.com from a £100 personal finance website into a multi-million-pound empire with 15 million monthly users in just a decade.

He sold the website – which now employs close to 100 people – to Moneysupermarket.com for £35m in 2012.

When Lewis sat down with Money Marketing he had just sold £25.2m-worth of shares in Moneysupermarket and announced he will be stepping down from the day-to-day running of the site this month.

He says the advice industry could learn a thing or two from how successful websites serve users.

“I genuinely believe in the IFA market; it is very valuable. But the industry has to look at its bounce rate,” he says, referring to the way web users immediately leave a site if it is not what they are looking for.

“The continued shenanigans around how advisers are regulated – terms like tied, multi-tied and IFAs – hasn’t helped and those distinctions have been blurred.

“My tip for the industry would be to know who you are and what you do. I often mistakenly get called a financial adviser, which I instantly correct, I am proudly a financial journalist. But the public think an adviser will get them cheaper gas and electric bills. That tells you something.

“Advisers should tell people what they can and can’t do, and then the customers you get will be the ones who actually need you. Don’t try and seduce people by pretending to be more than you are because they will be disappointed and that can be damaging for an industry’s reputation.”

Last month the Treasury unleashed what commentators have called RDR Mark II, a wide- ranging review of the market and the impact regulation has had on the affordability and availability of advice.

Lewis says the lack of mass-market advice was an inevitable consequence of the RDR.

“Commission bias was a less bad sin than just making it too expensive for the vast majority of people to get an IFA. We knew at the time that people wouldn’t be willing to pay fees.

“We want to encourage more forms of next generation financial guidance but I don’t think that will ever come close to what an IFA can deliver one-to-one.”

Money Advice Service

Lewis has long been critical of the Money Advice Service, the Treasury’s embattled financial guidance provider. He sits on the MAS challenger panel, set up following the damning Farnish review.

While he says the organisation has a “very different attitude” and is far from the “disaster” days of Gerard Lemos, Lewis says big changes are still needed.  “The IFA community and I are singing from the same song sheet on the MAS.

“The problem is that from day one it misunderstood its remit, which was to ensure the financial needs of the nation are being met. It chose to read that as its role was to meet those needs itself. The money should be for gap provision, not a rent-seeking, brand-building website that is trying to compete.”

Lewis says the levy currently funding MAS could be reallocated more effectively.

“If you told IFAs their money was being spent on improving education for the nation’s youth or kids leaving care at 18 with no idea about any form of independent finance, who have been institutionalised and get themselves in terrible trouble, I can’t see many objecting. It’s the same with financial education in schools. In the long run it is a way for IFAs to create new customers.”

Lewis’ own relationship with advisers has not always been smooth. “I am a big fan of people getting independent financial advice, and I have been doing so throughout my career, so I am somewhat disheartened when I see IFAs tend to think I have the horns of Beelzebub,” he says.

He has been criticised for coming close to giving recommendations on regulated products. But Lewis says the type of scrutiny that websites and IFAs face cannot be compared.

“I have had IFAs having a go saying it’s outrageous our site is not regulated. We are regulated in some areas where it is necessary to be but the bigger point is you can’t deny that, if an IFA were to give some horrendous advice one-on-one in their office, you have massive evidential issues with what’s happened.

“In my job, we published to 15 million people a month and you can check whatever we’ve written back in time. I have no deniability.

“So there is an implicit scrutiny of those of us who work in mass media and I would argue our scrutiny, while it is not regulatory scrutiny, is just as tight.”

Debt and mental health

So what is next for Lewis? He will stay on as executive chairman and continue to present his ITV show but he will devote more time to his charity work and set up a mental health and debt research organisation.

“The more I’ve done this job, the more I found that most people with debt issues have mental health issues. I’ve suffered from serious stress myself. I’ve been lucky that if I needed to take some time off I didn’t need to worry about paying the bills. God knows how I would have coped if I also had to panic about going to work when I couldn’t.”

He is also taking tentative steps outside financial services, eyeing a few non-executive directorships but swears MM to secrecy. Watch this space.

CV

2012-present: Presenter, The Martin Lewis Money Show (ITV1)

2011-present: Chair, Independent Task Force on Student Finance Communication

2003-present: Founder, Moneysaving expert.com

2000-present: Regular media commentator

1998-1999: Reporter/producer, BBC Business Unit

1995-1998: Account executive, Brunswick PR

What’s the best bit of advice you’ve received in your career?

Not everybody is capable of helping themselves.

What keeps you awake at night?

Everything. I find it very difficult to switch off.

What has had the most significant impact on financial advice in the last year?

Nothing comes close to pension freedoms. I have great concerns that the more
options you give people, the more difficult it is to make decisions. We’re a risk-averse nation and many people will die with money they haven’t spent and we’re encouraging that by cutting tax on money left over.

If I was in charge of the FCA for a day I would…

Resign.

Any advice for new advisers?

Provide a good, trusted service that goes the extra mile. In the long-term it will come back to you as you build a brand and a business.