25th June 2012
To make matters worse, chief executive Toby Hobman had to listen to another public figure and his nominal boss Financial Services Authority chairman Adair Turner suggest to MPs that on reflection Hobman's £350,000 pay packet was too high as trade website IFAonline reports.
The Mail on Sunday reports on big changes at the site which will extend its scope and beef up its interaction with consumers.
The site has helped around 1.3 million people in its first year of existence but MPs do not believe this is anywhere near good enough given the organisation's £43 million budget.
The website has undergone a baptism of fire in its first 12 months as Mindful Money reported last week. Most of the initial criticisms of the service came from the financial services industry but the chorus of disapproval has grown with MPs and high profile journalists such as self-styled Money Saving Expert Martin Lewis now joining in.
Lewis went so far as to describe the MAS website as ‘crap' a charge that is particularly stinging from the owner of a website that generates many millions of hits a year dwarfing MAS.
Last week, MAS bosses were given the chance to hit back in front of the influential Treasury select committee as trade paper Money Marketing reports.
MAS chairman Gerard Lemos took issue with the "crap" accusation made by Lewis. He told MPs: "I do not accept that our services are crap, 90 per cent of people using our services say they would come back, 60 per cent say they would recommend them to other people, but we feel we could make them a lot better."
"We are transforming the service in order to reach far more people and the way the service is communicated, over the next few months starting in July you will see a very different Money Advice Service. It will be more focused on encouraging decision making and taking action."
The Mail has now fleshed out some of the details of the changes.
It reports that users will be able to receive updates on financial matters they are interested in, such as mortgages, and have access to a far greater range of comparison tables on key financial products.
New tables on cash Isas, current accounts, credit cards and enhanced annuities will be made available, enabling users to sort good products from bad and click through to buy those they like. About 30 template letters are also being made available to assist consumers when they have to contact a company on a key issue such as bereavement in the family.
The difficulties of changing consumer behavior were underlined by MAS research into its own financial health check service conducted in March.
Of 1,000 people surveyed, 300 did not remember doing so and 371 failed to do anything differently. However more positively 329 people said it had changed their behavior to some extent.
Although these results are arguably mixed rather than disastrous, coverage in the trade newspapers was very harsh, though once again Martin Lewis didn't mince his words describing it as abominable.
MAS may not appreciate his comments, but it may be looking to emulate his success, giving the ambitious targets it is setting itself.
As FTAdviser reported last week, Lemos defended the £11m marketing spend on the basis that it may need to reach 19 million adults compared with the two million who use the Citizens Advice Bureau.
" We are spending a lot on marketing but this goes back to the gap. Success depends on closing the savings gap and we need to reach a lot of people to address this.
"Cab reaches out to two million and we want to reach out to 19 million, and we feel people need to know it's there," he told MPs.
It is also clear that the ‘advice gap' could grow. The financial watchdog the Financial Services Authority is banning Independent Financial Advisers and bank based financial advisers from receiving commission from the end of this year.
There have been predictions that numbers could fall sharply denying access to advice to many more consumers among both independent advice businesses and at the banks. But it is in bank advice where numbers are falling sharpest
Last week, RBS cut back its adviser numbers by 600 as the Sun reports here. Financial industry blog site the Money Debate suggests that taking all the recent cuts together this fall off is starting to resemble the last days of the insurance sales force. Most insurers axed their sales forces or cut numbers dramatically around a decade ago and the site suggests that banks are now following a similar trajectory.
Whether MAS, with its troubled first year and litany of blunders, is really the solution to filling this gap or at least stopping it getting wider remains to be seen.
UPDATE: Following the publication of this article a spokesmen from Money Advice Service got in touch to give us the following statement:
"Our transformation programme has been part of our strategy since 2010/11 and there is no link between the Select Committee’s enquiry and the upgrade. We announced our intention to undertake a major review of our products and services in our 2010/11 business plan). Enhancements to the Service – including a digital upgrade – were proposed to our levy payers in February 2012 and formally agreed in March 2012 when we published our Business Plan.