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Gov’t ups MAS scrutiny and promises review by 2015

by Michelle Abrego on Nov 29, 2012 at 07:31

Gov’t ups MAS scrutiny and promises review by 2015

The government, rather than incoming regulator the Financial Conduct Authority (FCA), will conduct a review of the Money Advice Service (MAS) by the end of 2015.

Speaking at the Treasury Select Committee’s MAS inquiry, economic secretary to the Treasury Sajid Javid (pictured) said he would carry out a review of the organisation to check how it was being run and to see if it was meeting its objectives.

‘I as the minister will be taking out a thorough review of MAS and looking at how its meeting objectives and how it’s running—especially with all the recent changes,’ he said.

‘I will expect to do this before the end of this parliament and when I carry out this review other stakeholders will be able to put their input into it as well.’

Labour MP George Mudie said he’d be ‘unhappy’ to leave the MAS running as it has been for another three years, as it was ‘a new organisation that has arbitrarily changed its total way of operation within a year’.

Javid, who replaced Mark Hoban as financial secretary to the Treasury in September, responded telling Mudie that MAS would remain under strong scrutiny until 2015.

He also revealed that MAS would be under the scope of the National Audit Office, which scrutinises public spending on the behalf of parliament.

Much of the committee’s criticism of MAS has focussed on its lack of accountability and the amount of money it has spent on staff salaries and marketing.

Javid though defended the £20 million marketing spend.

‘I had never heard of the MAS until six months ago,’ he said.

He added that the public needed to be aware of these services if they were to use them, and that since MAS was relatively new it needed time to be marketed.

10 comments so far. Why not have your say?

Charles Rickards

Nov 29, 2012 at 08:25

Yet more money down the drain! When are the government going to get on with running the country, rather than tinkering with non significant matters. If proper financial education was on the school curriculum, then we wouldn't need MAS or so many nanny state rules and regulations.

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Stratfield

Nov 29, 2012 at 08:43

‘I had never heard of the MAS until six months ago,’ said the financial secretary to the Treasury.

Just like a Lord; Rome / fiddle / burn

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Annon

Nov 29, 2012 at 09:00

jan 1st 2015 in FCA diary

Action: ask MAS if it is authorised to give advice, qualified to give advice or actually gives advice

jan 2nd 2015 in FCA diary

bring MAS into line with industry and tell it to stop using misleading titles

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Man of Kent

Nov 29, 2012 at 09:33

@ Stratfield

Here's a clue about why he hadn't heard of MAS - "...Javid, who replaced Mark Hoban as financial secretary to the Treasury in September..."

He certainly wouldn't have been alerted by meaningful advertising, would he?

You're surely not likening the MAS to Rome?

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Anitaki

Nov 29, 2012 at 09:41

Please sir, I'd like a seat on the "MAS scrutiny Quango gravy train please"

40 years in Financial Services surely makes me better qualified than the apparatchiks who have never had a "proper job" and the unelected and unqualified professional quango chair hoppers who generally get appointed to these parties.

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Julian Stevens

Nov 29, 2012 at 10:59

What measures does the government propose to quantify whether or not the MAS actually achieves anything of tangible value to the industry and to consumers? The only worthwhile yardstick by which the success of the MAS can be measured is not how many people visit its website or go through one of its online questionnaires or phone in for a chat or even meet up with one of its consultants. It's how many people who do any of those things take action and actually DO something that involves committing money. That's the bottom line, isn't it? Nothing is for nothing.

Addressing shortfalls in one's financial planning strategy ~ in fact, embarking on any sort of financial planning strategy at all ~ means committing money to something, be it life insurance, Income Protection, a pension plan, a long term savings plan or whatever. If people availing themselves of the guidance available from the MAS don't actually do anything as a result because they were expecting to be provided with an all-encompassing strategy costing no more than £19.99 p.m. then all the tens of millions of pounds taken from us and spent by the MAS will have accomplished nothing beyond explaining to people what they ought to be doing. The crunch point is whether or not those people take out some protection insurance or start a pension plan or start saving regularly into an ISA. Those things, so far, appear not to be happening.

What, if any, systems does the MAS operate to record how many people have actually done anything meaningful in the wake of having availed themselves of its services? If the MAS does in fact operate such a system, then it should publish the data for all to see and to assess. If it doesn't operate such a system, why not? Or, if it does but refuses to publish the relevant data, then on what basis are we who are forced to fund it to assume anything other than that it's just another hugely costly but ultimately impotent white elephant?

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Stratfield

Nov 29, 2012 at 12:13

@ Man of Kent..... exactly. My point though is that I really would have hoped that the replacement for Mr Smug had at least put on his CV that he has heard of the MAS ! Which begs the question, just what DOES he know and what searching questions was he asked at his interview?

@Julian....spot on, how will they measure the effecftiveness of the MAS?

In truth financial services products have to be SOLD (ooooh, that dirty word again), whether by a tied rep or an uber qualified whole of market IFA. Who buys life cover because they wake up one morning and say "hmmmm, I think I'll buy some life cover to day" ? All of the highly intellectual utopian thinking behind the RDR, and it's devil spawn the MAS, will never ever change that basic fact of life. Auto enrolment is a classic example that in financial services the average man in the street has to be sold, or told.

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Richard Hardy

Nov 29, 2012 at 15:08

I don't see Ford, Vauxhall, BMW et al providing funding to an alternative to buying a service from them.

Only in financial services!

You just couldn't make it up!

I'm waiting for the financial services version of '2012' or 'The Thick of It'.

Scriptwriters would kill for this type of material!

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Lyndon Edwards

Nov 29, 2012 at 17:23

No rush then. . .

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P L H

Nov 30, 2012 at 10:14

'Yes, it's absolutely fine that they should be marketing their wares through massively expensive tv adverts. I don't know what they do or whether they are doing it right, but I am completely happy for them to be spending all this money telling people about it for the next 2 years before I do any checks on whether it's appropriate'

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