The government has today (March 20 2015) published its response to the independent review, led by Christine Farnish, into the Money Advice Service (MAS), which was also published today. MAS and the Financial Conduct Authority (FCA), which oversees how MAS is run, have also responded to the independent review.
MAS is a body set up by the government to ensure consumers have access to financial education and advice. The government appointed Christine Farnish in May 2014 to lead an independent review of MAS.
The responses set out what MAS, the FCA and the government will do to meet the challenges and recommendations set out in the review, and improve how MAS delivers against its objectives.
On debt advice, the review finds that MAS has made strong progress since 2012, and the government welcomes the review’s recommendations that MAS should make sure customers continue to receive high quality debt advice while ensuring value for money. MAS has committed to establish a Debt Advice Steering Group to support the implementation of the review’s recommendations, including by helping customers receive advice through the channel that best meets their needs.
The government also welcomes the commitment secured by the review from the energy and water sectors to each contribute £1 million to MAS-funded debt advice in the next financial year. This is an important step towards a broader, fairer and more sustainable funding base for debt advice.
On the provision of money advice, the review recommends that MAS should focus on filling gaps in the market, and avoid duplicating the services offered by other providers of financial education and advice. The government supports this objective, and welcomes the commitment from MAS and the FCA to implement a number of the review’s recommendations, including improving the way that they work together.
Overall, MAS and the FCA have committed to work together to address the questions raised by the review about MAS’s current focus and delivery models, and to publish evidence and action plans and submit them to the government in the autumn.
The government will then consider whether any further changes to MAS are needed, including possible legislative changes, and will publish its conclusions before the end of the year. Any changes will need to be considered within the context of future plans and developments in the financial information and advice sector, including as a result of the government’s pension changes which are coming into force from April.
Responding to the independent review’s final report, Economic Secretary Andrea Leadsom said:
Making sure that customers have access to high-quality financial education and advice is a key part of our long term economic plan.
That’s why I am pleased to announce that the government has published the final report from the independent review of the Money Advice Service, together with its response. I am grateful to Christine for her work in leading this review, which makes a number of important recommendations for improving the way MAS is run.
I welcome the steps that MAS has announced today, alongside its commitment to consider the review’s recommendations in full and submit a proposed action plan to the government in the autumn.
Christine Farnish said:
MAS needs to reboot its business model. If my recommendations are followed, consumers’ ability to understand and navigate complex financial services markets will be enhanced.
Critically, instead of competing as a public service provider in an already crowded market, MAS should work on behalf of consumers to strengthen the supply of good, accessible consumer financial information and guidance.
The review explains how these consumer benefits could be achieved at lower cost and with greater accountability.
The review is a challenge to MAS but also an opportunity, and one which is capable of being realised. Consumers will be better served as a result.”