Press release: Independent Review confirms Money Advice Service's role in helping consumers

Friday 20 March 2015

The Money Advice Service and a number of its partners have welcomed Christine Farnish’s review into the Money Advice Service and the direction it provides on the Service’s role in helping consumers to manage their money.

Caroline Rookes, Chief Executive for the Money Advice Service, said: “The Independent Review has found that levels of financial capability in the UK remain low. Our own research shows that 50% of people struggle to pay bills and credit commitments and 9 million people are over-indebted. In this context, Christine Farnish has confirmed that the Money Advice Service has two important functions: helping people who face problem debt get the help they need, and helping consumers understand financial services and make better decisions.

“The review has found that our work on debt advice has been largely successful and has made a positive difference for consumers. I welcome that. And I’m particularly pleased that the water and energy industries are announcing today that they will contribute to funding free debt advice, with each sector providing £1 million this year.

“I welcome the review’s conclusion that the Service should play a greater role in co-ordinating and aligning the various initiatives across all sectors to provide improved advice and educa-tion to consumers. Christine Farnish is very clear that the Financial Capability Strategy for the UK which we are leading, and the consumer awareness campaigns that we have run, are exactly the type of initiatives we should be pursuing.

“The review has challenged the way we do our money advice work in particular. All organisations need to evolve as circumstances change, especially new organisations such as ours.

In addressing the money advice recommendations, we want to ensure that changes we make are genuinely in the interests of consumers and deliver value for money. We currently help thousands of people every day to take action to manage their money better and in contemplating changes, we must not let those consumers down.

“So we will now work closely with the FCA, the financial services industry, consumer groups, the voluntary sector and other experts, to assess how the recommendations could be implemented in a way that would best benefit consumers and enhance the financial capability of the UK.”

Louise Hanson, Director of Advocacy at the ABI, comments:

“The Money Advice Service plays a significant role in helping people make informed decisions, by improving financial capability and ensuring consumers are aware of the options available to them. It is important that industry, stakeholders and consumer organisations continue to work together to deliver the tools and information that helps consumers to make important financial decisions. There are big challenges ahead, most immediately the freedom and choice retirement reforms in April, for which financial guidance will be more important than ever.”

Otto Thoresen, author of the Thoresen Review which led to the creation of the Money Advice Service, said:

“Helping people become more financially resilient is more important today than ever. The report rightly points out that the world has changed since we published our review, particularly in the area of web based tools and information sources. We always saw MAS as a collaborative organisation working in partnership with existing providers of advice and guidance. I welcome the Farnish Review’s endorsement of that approach and the Financial Capability Strategy that MAS is leading, which embodies it.”

Joanna Elson OBE, Chief Executive of the Money Advice Trust, the charity that runs National Debtline, said:

“We welcome this thorough review and stand ready to help as the Treasury and others work through the next steps for the Money Advice Service (MAS). We are pleased to see the review make a strong case for free debt advice and the benefits this brings to individuals and society.

“In addition, the pledging within the Farnish review of some additional funds for free debt advice from sectors outside of financial services is an encouraging sign for the future. This should build on the work we have already been doing to engage utility and telecoms companies in supporting the services we provide. ”

Daniel Godfrey, Chief Executive of The Investment Association, said:

“The role of MAS is to ensure that consumers have access to all the information they need to make informed financial decisions.

“The Investment Association is committed to improving financial capability and the availability of help for consumers. We support the recommendation that MAS should focus on a role as co-ordinator and, where necessary, a commissioner of information and guidance across the universe of financial needs. There are already many commercial and not-for-profit providers and MAS should play the key role in ensuring comprehensive provision of high quality resources.”

Sue Lewis, Chair of the Financial Services Consumer Panel, said:

“The job MAS was set up to do still needs to be done. Financial services markets can be complex, and firms do little to make them more transparent. To make these markets work better for consumers, we need a balance between conduct regulation and increasing consumers’ ability to use what is on offer and avoid the pitfalls. Christine Farnish’s recommendations should align MAS better with this need to inform and empower consumers. The Consumer Panel welcomes the recommendation for closer co-ordination between MAS, the FCA and the rest of the regulatory ‘family’, and we will be happy to play our part in this.”

View the Money Advice Service’s formal response

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NOTES TO EDITORS

Caroline Rookes is available for interview. Please contact the Money Advice Service Press Office on 020 7943 0593 pressoffice@moneyadviceservice.org.uk to arrange a slot.

About the Money Advice Service

The Money Advice Service is an independent organisation. Set up by government to help people make the most of their money, it gives free, unbiased money advice across the UK – online, over the phone and face to face. Paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority, its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system), and to enhance the ability of the public to manage their own financial affairs.