Memorandum submitted by the Money Advice
Trust
The Money Advice Trust is pleased to respond
to the above inquiry, specifically commenting on the "Financial
education and financial advice" section.
The Money Advice Trust (MAT) is a charity formed
in 1991 to increase the quality and availability of free, independent
money advice in the UK. We work in partnership with government,
the private sector and the UK's leading money advice agencies
to:
— Increase the availability of money
advice
— Improve the efficiency and effectiveness
of its delivery
MAT operates National Debtline, which is a free
helpline for people with debt problems, providing a holistic service
addressing unmet demand for money advice via the telephone.
SECTION 3: FINANCIAL
EDUCATION AND
ACCESS TO
FINANCIAL ADVICE
1. We believe a substantial gap exists in
the provision of generic (ie non product specific) advice that
needs to be addressed. We are supportive of the initiatives in
train, in particular the work being undertaken by the FSA as part
of its financial capability work, but have a real concern over
how the delivery of generic advice will be funded and any assumptions
being made over the ability of the voluntary sector to undertake
this.
2. In looking at how generic advice might
be delivered, it needs to be recognised that the voluntary sector
money advice agencies are struggling to cope with demand for debt
advice and do not currently have the capacity to move into the
provision of generic advice without additional funding and resources.
Any increase in the provision of generic advice should not be
at the expense of the currently inadequate supply of free debt
advice.
3. It needs to be appreciated that for those
who are financially excluded, the advice sought is more likely
to be around benefits and access to credit than advice on savings
and investments. The exceptions to this may be in the area of
advice on pensions, particularly if the recommendations of the
Turner report are enacted and the receipt of legacies.
4. Through our work in the provision of
free debt advice in the UK, we observe that there does not appear
to be a universally accepted definition of "Generic Financial
Advice". Such an agreed definition would help the various
stakeholders better understand how they might fit in.
5. Our view is that Government should take
a lead role in addressing the issue of financial exclusion and
we are pleased to see the focus being given to this by the Treasury
and specifically the Financial Inclusion Taskforce. A government
lead would help with co-ordination of all inter-related initiatives.
January 2006
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