HC 271 Money Advice Service

Written evidence submitted by the United Kingdom Shareholders’ Association

1. About UKSA

1.1. The UK Shareholders’ Association is the principal representative body of private investors in the UK and has been so for 20 years. We are a membership organisation funded solely by our members; we receive no public subsidy. We believe in responsible investing. Our interest in financial education for the many is rooted in the belief that given full, clear and unbiased information individuals will understand the benefits of direct equity investment and will understand that the performance of companies in which they invest affects their own future. That will in turn lead to more effective governance of quoted companies.

2. Executive Summary

2.1. Our conclusions are:

· The Money Advice Service (MAS) should have one statutory objective and not two.

· It is not clear that its objectives are being met.

· It has not shown adequate standards of competence, as evidenced by its website which ought to be the flagship of any mass education initiative.

· Its claim to independence is misleading

· There has been a decline in transparency since its new governance structure was implemented in 2010.

· These failures of both planning and execution may be attributable to weaknesses in that structure.

2.2. Our evidence for these assertions is contained in four Appendices:

A. Evidence from the Business Plans and Annual Reports of the FSA and MAS

B. Draft Memorandum of Understanding between MAS and the Financial Conduct Authority (FCA)

C. Detailed critique of the design and functionality of the MAS website.

D. Detailed critique of the content of the MAS website.

2.3. Our solutions, summarised, are to introduce standards of transparency and governance appropriate to a body responsible for mass education, replacing the current standards inherited from the regulator.

3. Commentary

3.1. Governance

3.1.1. In its published material the MAS frequently refers to itself as ‘independent’. In context that appears to mean ‘independent of the regulator’ (the FSA as it used to be, the Financial Conduct Authority – FCA – as it will become).

3.1.2. The expected relationship between the two is defined by a six-page draft Memorandum of Understanding (Appendix B) prepared to ‘help Parliamentarians and other stakeholders understand what is proposed. It comprises 43 clauses which state, inter alia (refer particularly clauses 11-13), that the FCA will have responsibility for: hiring/firing the MAS board; approving budgets and plans; appointing an independent reviewer of its efficiency and effectiveness; monitoring its activities; and receiving its half-yearly and annual reports, board minutes and periodic performance reports. This describes a relationship equivalent to that of a wholly owned subsidiary in a commercial context, which would not normally be described as ‘independent’.

3.1.3. This lack of independence compromises its position as source of independent advice.

3.1.4. There is a symbiotic relationship between any regulator and the industry it regulates. The FSA has historically found it difficult to reconcile its position as a regulator with its responsibilities for consumer protection. This has led it to some unfortunate compromises – for example its refusal, over a period of at least 13 years, to prevent commissioned product salesmen to describe themselves as ‘advisers’, thus promoting the fiction that free advice was available and undermining the market for genuine paid advice.

3.1.5. Trust is an essential characteristic for a successful public advice service. So long as the MAS remains under the regulator there will always be a suspicion that the interests of the industry are taking precedence. An industry seeking to shift product does not necessarily welcome an educated consumer.

3.1.6. We refer also to our evidence previously given to the Lords Select Committee on the Financial Services Bill 2000, which protested the clauses of this statute enshrining responsibility for consumer education with the FSA, and therefore with the regulator.

3.2. Statutory Objectives

3.2.1. The MAS has two statutory objectives:

· to enhance the understanding and knowledge of members of the public of financial matters (including the UK financial system).

· to enhance the ability of members of the public to manage their own financial affairs.

3.2.2. The first objective is inappropriate for a quasi-public body. There is no public interest need for the public (as a whole) to understand financial matters – least of all the UK financial. Substitute ‘health’ or ‘educational’ or ‘parliamentary’ for the word ‘financial’ and the intent is equally desirable but there is (rightly) no equivalent publicly funded body to carry it out. It is (rightly) left to the diverse but efficient informal networks by which people learn – media, the classroom, personal experience and informal advice.

3.2.3. The second objective is, or should be, the key one – indeed the only one. Members of the public need to be able to manage their personal affairs as a matter of social necessity, and that includes their financial affairs.

3.3. Strategic objectives

3.3.1. The MAS has published three annual business plans since its formation (one under its statutory name of ‘Consumer Finance Education Body’), and these include its own deconstruction of its statutory objectives. These have tended towards the visionary and away from the concrete (Appendix A).

3.3.2. The most recent major planning document is a supplementary 2012/13 ‘Debt Advice Business Plan’ covering an additional budget of £34.5million. The general description of its objectives is:

Our role is to bring coherence and consistency, while enabling a more efficient and effective service for customers. We need to ensure that debt advice reaches more people with a more consistent offer and improved long term outcomes. We will work to co-ordinate provision from other debt advice providers, setting standards, ensuring effective triage, and monitoring performance……’

3.3.3. The featured numerical target in the 2012/13 Plan is ‘reaching 11.3 million people by 2016/17 out of the 19 million assessed as capable of benefiting from the service’. The FSA 2009/10 Plan, reporting in the last year of its 5-year Financial Capability programme that preceded the spin-off of the MAS, noted: ‘The programme is designed to reach 10m people by 2011, the end of our five-year strategy’. The MAS referred to themselves, in their first Plan, as ‘previously a division of the FSA’ (Appendix A).

The word ‘reaching’ has never been defined. It is not clear in what way the ‘reaching’ of 11 million people in 2016 differs from the ‘reaching’ of 10 million people in 2011 sufficient to justify a likely spend of £250million (excluding debt advice) in that time.

3.4. Delivery

3.4.1. To review the extent to which the MAS, and the Financial Capability Project within the FSA before it, have delivered against their plans and objectives we have analysed the information in their Business Plans and Annual Reports (Appendix A).

3.4.2. In contrast to those of the FSA, the Annual Reports of the MAS, if they exist, have not been made freely available to the public. We have therefore relied on occasional references to the past in its three Business Plans.

3.4.3. We have also critiqued the MAS website as an important part of its delivery, and the only part available to general public view. In our view it is inadequate both in terms of its design and functionality (Appendix C) and content (Appendix D). It also duplicates, in a noticeably less attractive way, commercial websites operating in the same field.

3.4.4. We submit this critique as evidence that raises questions about the effectiveness of the whole. We are unable to find any reference to external peer reviews or other quality processes. There is mention of a Consumer Forum but no reports of its proceedings and we assume its purpose is consultation not quality control.

3.4.5. A 2010 review of the Pathfinder Money Guidance service (a trial for the full MAS) by the Personal Finance Research Centre at Bristol University noted that 9% of the advice given in face-to-face and telephone interviews was incorrect.

3.4.6. We note that numerical measures have tended to be of outputs, not outcomes (e.g. ‘reaching’ above). They are not consistently reported in the form of result vs. plan.

3.4.7. We have no comment on the administration of the activities the MAS has chosen to undertake, but we question the cost effectiveness of the activities themselves – particularly a marketing budget of £20million (45% of the total £46.3million) for 2012/13. This is a free service that, if it’s satisfying a need, ought to sell itself.

4. Solutions

4.1. UKSA has always argued for a consumer protection body away from the influence of the industry and the regulator. We recognise that that battle has, for the time being, been lost.

4.2. A lesser solution would be to separate the MAS from the regulator.

4.3. To make improvements without such radical changes, the MAS needs to be regarded more as an educational resource whose subject happens to be personal money management, and not as a branch of the regulator whose field of interest happens to be education. It should have governance processes that ensure that it is transparent, accountable and acts in the interests of the community as a whole. Specifically:

4.3.1. It should publish annual reports.

4.3.2. It should expose itself to public scrutiny of its reports, perhaps through an AGM-style pubic meeting.

4.3.3. It should publish its Board Minutes.

4.3.4. It should have an advisory panel to review the content of its educational material. The ideal panel would be a blend of teaching, academic and community experience, independent of both the industry and the establishment.

4.3.5. It should have measurable targets for outcomes, not just outputs, against which it should report publicly

This report has been prepared by the UKSA policy group. The principal author is John Hunter MA FCCA. Mr Hunter is currently Chairman of the Investment Committee of the pension fund of a FTSE100 company and has substantial experience of corporate financial matters and personal investment in both the UK and USA.

June 2012

Appendix A

Evidence from Plans and Reports, 1999-2013


1. History to 2010

1.1. From 1997 the FSA published Business Plans for each coming year and Annual Reports for the year past – all still available on its website. The information in this appendix is abstracted from those documents.

1.2. In 1999 the FSA introduced the consumer section to its website. Over the period to 2005 a range of initiatives were mentioned; among them: ‘Education for Financial Capability’; ‘Adult Learning Programme’; ‘Consumer Publications’; ‘Consumer Help Website’; ‘Consumer Campaigns’; ‘Consumer Research’; Consumer Helpline; ‘Comparative Tables’; ‘Interactive adult learning programme’; and ‘tools to analyse consumer products and their inherent risks’.

1.3. The 2005/6 Business Plan included mention of a ‘National Strategy for Financial Capability’ and also ‘launching a financial healthcheck tool on websites’

1.4. From 2006-2010 the FSA reported on the National Strategy each year under the heading: ‘Financial Capability’

1.5. In 2009/10 the FSA announced ‘government plans to create a Consumer Financial Education Body’ (CFEB), with ‘a new governance structure to facilitate roll-out of a national money guidance platform’

1.6. The same report announced MoneyMadeClear, a new ‘money guidance pathfinder’ to include an advice website.

1.7. The report concludes : Over the last year, we have achieved most of our targets, and in some cases exceeded them. We estimate that so far our programme of work has reached 9.3m people. The programme is designed to reach 10m people by 2011, the end of our five-year strategy.

1.8. In general quantified achievements were reported in terms of outputs, (i.e leaflets distributed, website hits, phone calls received courses delivered), not outcomes. Only rarely were measured achievements clearly reported against previously set targets.

2. Money Advice Service

2.1. The CFEB was re-branded as MAS. It was in fact just the old Financial Capability team, as evidenced by the words in its first Business Plan: ‘This year marks the final phase of the five-year Delivering Change strategy, begun when we were a division of the Financial Services Authority’.

2.2. The MAS has published three business plans – 2010/11, 2011/12 and 2012/13. There ought to be two Annual Reports, but, oddly, these do not appear to be available to the general public: the website is silent; and Googling produces just two links – one from Hansard on 15/11/11 giving a parliamentary reply which refers to ‘the published annual report for the year to 31 March 2011’ and one a response to a freedom of information request from Mr B Whittle dated March 26 2012 stating the reply was ‘delayed’.

2.3. To guess what’s going on we therefore have to rely on the Business Plans for hints of achievement in prior years.

2.4. This first Plan of the MAS (initially called the Consumer Financial Education Body – CFEB) starts with a clean sheet as though the previous five years of work on Financial Capability by the same people had never existed. It is wrapped up with the words; ‘Over the course of that time a range of targeted interventions have been developed and delivered to people of all ages and all walks of life’.

2.5. For the future: ‘Our four key priorities for this year are to complete our Delivering Change strategy, to set up the national financial advice service, to work towards operational independence, and to develop our long-term strategy which we will deliver from April 2011’.

2.6. The second MAS plan, to 31 March 2012, reports: ‘2010/11 was a year of transition. Much of the last 12 months has been taken up with completing the FSA’s five-yearDelivering Change’ strategic initiative.’ But there’s no report on this. So five years of ‘strategic initiative’ have passed without any reportable outcomes.

3. Delivery

3.1. In the 2011/12 plan there is some quantified data For example: ‘Du ri ng 2 0 1 0 / 1 1 w e a c h i e v ed ov e r 1 , 5 0 0, 00 0 co n tac t s a c r o ss a n umber o f o ur k e y p r od u c t s a n d de l i v e r y c h a n n e l s , w i t h c ur r e n t r e s e a r ch co n f i r min g 4 5 % o f t h e s e u s e rs w il l h av e r e cei v ed c o m p l e t e ly n e w i n f o rm at i on a n d 8 % o f t h e s e w il l h av e t a k e n sp e ci f i c a c t i o n s’ . Whether or not this means anything depends entirely on the meaning of ‘contacts’, ‘new information’ and ‘specific actions’, and on evidence of cause and effect.

3.2. In the 2012/13 plan there is only one mention of 2011/12 performance. It is in a secondary area and, unfortunately, a good example of how to lie with statistics:

W e a l r e a d y h av e s tr o ng e v i d e n c e o f t h e s ucc es s f ul i m pact o f o u r 2 0 1 1 / 1 2 a d v e r t i s ing in g e t t ing p e op l e t o u se o u r S e r v i c e . W h e n o u r a d v e r t i s ing is r u nning w e s e e , o n av e ra g e , a 6 2 % in c r e a se in v i s i t s t o o u r w e b s i t e . T his sam e a c t i v i t y h a s r e sul t e d in a n 87 % in c r e a se in p e o p l e v i s i t ing o u r h e a l t h ch e c k .’

(Hint: if only100 people visited the website before advertising, and 162 visited after, does that indicate an effective use of advertising – cost unspecified?).

3.3. This plan also sets out a long-term target of ‘reaching 11.3 million people by 2016-17 out of the 19 million assessed as capable of benefiting from the service’. Compare 1.7 above.

June 2012

Appendix B


Available from both MAS and FSA websites. Reproduced below as downloaded.

Memorandum of Understanding between the Financial Conduct Authority (the FCA) and the Money Advice Service


1. This Memorandum of Understanding (MoU):

 establishes a framework for cooperation between the FCA and the Money Advice Service. It sets out (1) the role of each party, and (2) explains how they work together. Its aim is to lay out procedures for discussing matters of common interest and sharing information.

 will be reviewed and updated regularly and in the light of new issues and priorities.

The first review will be completed within a year of the relevant provisions of the Financial Services Act [ ] amending the Financial Services and Markets Act 2000 (FSMA) being enacted.

 is required by FSMA as amended, is a statement of intent and does not create any enforceable rights.

 has effect from [insert date].

2. The parties acknowledge that they may only provide information under this MoU if permitted or not prevented under applicable laws, regulations and requirements.

Roles and responsibilities of the FCA and the Money Advice Service

3. Broadly, under FSMA the FCA is responsible for:

 regulating standards of conduct in retail and wholesale markets;

 supervising trading infrastructures that support those markets;

 the prudential supervision of firms that are not PRA-regulated; and

 the functions of the UK Listing Authority (UKLA).

4. The FCA has a single strategic objective to ensure that the markets for financial services function well. Three operational objectives support this:

 securing an appropriate degree of protection for consumers (including wholesale consumers);

 protecting and enhancing the integrity of the UK financial system; and

 promoting effective competition in the interests of consumers in the markets for financial services.

5. FSMA gives the FCA the power to make and enforce rules governing the conduct of regulated firms.

6. The Money Advice Service’s statutory function is to enhance:

 the understanding and knowledge of members of the public of financial matters

(including the UK financial system); and

 the ability of members of the public to manage their own financial affairs.

7. This includes, in particular:

 promoting awareness of the benefits of financial planning;

 promoting awareness of the financial advantages and disadvantages in relation to the supply of particular kinds of goods or services;

 promoting awareness of the benefits and risks associated with different kinds of financial dealing (which includes informing the FCA and other bodies of those

benefits and risks);

 the publication of educational materials or the carrying out of other educational activities;

 the provision of information and advice to members of the public;

 assisting members of the public with the management of debt;

 working with other organisations which provide debt services, with a view to improving –

i. the availability to the public of those services;

ii. the quality of the services provided; and

iii. consistency in the services available, in the way in which they are provided and in the advice given.

8. In carrying out its statutory function, the Money Advice Service must have regard to the duty of the FCA to advance its operational objectives.

9. The FCA must take such steps as are necessary to ensure the Money Advice Service is, at all times, capable of undertaking its statutory function.

10. In considering what degree of consumer protection may be appropriate, the FCA must have regard to any information which the Money Advice Service has provided to the FCA.

11. The FCA has the following responsibilities in respect of the Money Advice Service:

 the appointment and removal of the Board (with approval of the Treasury in the case of the chair or chief executive);

 approving the annual budget and business plans (including any variations);

 levying sums, on behalf of the Money Advice Service, from FSMA authorised firms, payment service providers and electronic money issuers;

 receiving an annual report in relation to the discharge of the Money Advice Service’s statutory duties;

 receiving a copy of the certified accounts and report; and

 if the FCA considers it appropriate, the appointment of an independent person to conduct reviews into the economy, efficiency and effectiveness of the Money Advice

Service’s use of its resources when carrying out its statutory function.

12. Respecting the independence of the Money Advice Service in carrying out its statutory function, the FCA and Money Advice Service have arrangements to enable the FCA to monitor the activities of the Money Advice Service, with a view to ensuring the Money Advice Service is capable of exercising its statutory function and to enable the FCA to properly discharge its responsibilities.

13. As part of these arrangements, the Money Advice Service will provide the FCA with:

 half yearly reports in relation to the discharge of its statutory function;

 an annual report setting out the extent to which it has met its objectives, with a copy of its latest accounts and the report by the Comptroller and Auditor General;

 copies of Board minutes; and

 periodic performance reporting.

14. The Money Advice Service will prepare its accounts in line with the relevant provisions of the Companies Act, and any directions from the Treasury. The Money Advice Service will consult the FCA if any changes are proposed to the current basis on which its annual report and accounts are prepared.

Principles for the relationship

15. The FCA and Money Advice Service will each take steps as they consider appropriate to co-operate with the other in the exercise of their functions. The following principles will guide and govern the working relationship between the FCA and the Money Advice Service:

16. The Money Advice Service is independent of the FCA in carrying out its statutory function. However the FCA is required to ensure the Money Advice Service is capable of undertaking that function.

17. The regulatory framework includes oversight of the Money Advice Service by the FCA.

The Money Advice Service will support the FCA in carrying out its oversight role by

agreeing to provide appropriate and timely information to the FCA.

18. The Money Advice Service will help the FCA in ensuring that the relevant markets work well by:

 empowering people to engage confidently with the retail financial services market;

 giving people a sense of control of their financial affairs;

 promoting informed choices;

 providing trusted, free non-sales advice; and

 encouraging and enabling people to take appropriate further action.

19. The Money Advice Service will help the FCA secure appropriate consumer protection by providing the FCA (and others) with information about potential consumer detriment and communicating to the public about issues and risks associated with the financial marketplace.

20. The FCA and Money Advice Service will consult each other on issues which may be of significance to the other party.

21. Both organisations will work together to create an efficient and effective system, including by minimising duplication.

Working together

22. In the course of their respective activities, each party will undertake reasonable endeavours to engage the other, particularly where there is substantial gain to be realised

from that involvement or where the activities of one will have a material impact on the other.

23. The FCA and Money Advice Service will on occasions engage in similar activities, for example when providing information directly to consumers. The FCA and the Money Advice Service will work on the principle of non-duplication and will take a coordinated approach. It will be the decision of the initiating organisation as to the appropriate point to involve the other – this may be at a project’s inception, but equally may be at any other juncture.

24. Areas where the FCA and the Money Advice Service expect to work together closely include:

25. Consumer information and advice

To minimise inconsistency and duplication and to promote coordination, the FCA and the

Money Advice Service will, where appropriate, work together on information aimed at consumers.

 The FCA will assist the Money Advice Service, when requested, in reviewing materials for the Money Advice Service, including regular audits conducted approximately three times a year. Where there are questions relating to technical accuracy, the Money Advice Service can expect FCA policy owners to review material and provide comments to a mutually agreed timetable.

 The FCA’s own consumer communications capability will seek to complement, and not duplicate, the work of the Money Advice Service. Where appropriate, when the FCA finds reason for the creation of new consumer information it will, in the first instance, inform the Money Advice Service so that an appropriately co-ordinated response can be agreed.

 Where Money Advice Service materials form part of or are referenced in FCA rules, the Money Advice Service will consult the FCA of any significant changes to these materials and agree a timetable, if appropriate.

 Occasionally, the FCA and Money Advice Service may publish information jointly, in which case full sign-off will be undertaken by both organisations.

 The Money Advice Service has ultimate responsibility for, and editorial control, over all material (except where content is jointly owned).

26. Advice landscape

The FCA and the Money Advice Service will endeavour to involve each other in discussions around the framework and landscape for financial advice and in particular

how this impinges on consumer understanding of the types of advice available to them and the rights and responsibilities attached to these types of advice.

27. Access to products and financial inclusion

Where appropriate and taking account of the statutory objectives of each organisation, the

FCA and Money Advice Service may collaborate to ensure that both organisations’ work enhances access to products and takes account of relevant policy developments that affect financial exclusion.

28. Strategic oversight of financial education

To minimise duplication and promote co-ordination with the financial services industry, the Money Advice Service will undertake a strategic oversight role in respect of financial education for young people and, as appropriate, share information with the FCA where this is judged to be relevant to the exercise of the FCA’s statutory functions.

29. Regulatory transparency

The Money Advice Service may advise the FCA on how best to achieve regulatory transparency, to help consumers make better financial choices and make use of regulatory information

30. EU and international issues

The FCA and Money Advice Service will share their respective views on relevant EU and international issues, including relevant policy developments, discussed by the European Supervisory Authorities and other international bodies, where appropriate. The FCA and Money Advice Service will also seek to co-ordinate their engagement with EU and international bodies on matters of common interest, so as to deliver effective representation and influencing. Where appropriate, the Money Advice Service will lead participation on financial capability, financial education and other matters within its remit.

31. Equality Duties

Working together will also extend, where appropriate, to FCA and Money Advice Service’s duties under Equality legislation, particularly each organisation’s duty to have due regard to the need to promote equality, eliminate discrimination and foster good relations.

Exchanging information

32. Timely and focused exchange of relevant information is essential to delivering effective co-ordination and co-operation in the necessary areas. The FCA and the Money Advice Service will exchange information where it is judged to be useful to help both organisations in fulfilling their respective functions.

33. Exchange of information will take place at many levels. Where one organisation considers that it has, in its opinion, information that would be of assistance to the other, it will actively offer such information to the other. Not all information will be shared because that is unnecessary and would overwhelm each organisation with information that was not central to its mission.

34. The FCA will, as appropriate, share consumer-related information where it is not specific to a named firm or individual, including:

 regulatory changes;

emerging consumer risks derived from its from market and conduct risk analysis;

 product features, particularly where any changes may give rise to opportunities or risks for consumers;

concerns about specific classes of products or practices;

 firm or product news, health warnings and warning notices.

35. In the same way, the Money Advice Service will, as appropriate, share information (on an anonymised basis) including:

 consumer intelligence;

 emerging consumer risk information, including information involving concerns about specific products or practices;

 consumer research and evaluation reports.

36. Each organisation will take a judgement-based approach to sharing information and each will be responsible for validation and quality checking, as well as collecting information in a timely and efficient manner.

37. The FCA will abide by the restrictions imposed on it by FSMA on disclosing confidential information (as defined in FSMA) it receives in the course of carrying out its functions.

38. The Money Advice Service agrees that, where the FCA shares information that is not yet publicly available, that information may not be disclosed to any third party without prior consent from the FCA, or until such time as it becomes publicly available.

Meetings and informal contact

39. Each organisation will appoint a senior executive responsible for the co-ordination set out in this MoU.

40. The FCA and Money Advice Service agree to communicate regularly. This will be underpinned by regular meetings and informal contact at executive level and includes strategic dialogue with the Money Advice Service’s Board, including half yearly meetings with the Money Advice Service Chairman, quarterly meetings between the Chief Executives and regular meetings at executive and working level.

41. The FCA and Money Advice Service agree to:

 consult one another on issues which might have significant implications for the other organisation.

 invite one another to participate, where appropriate, in one another’s policy-making forums.

42. Where conflicts arise, these will be handled at working level; escalated as appropriate to senior management and, exceptionally, to Board level.

43. The FCA and the Money Advice Service will allocate resources to ensure liaison between the two agencies is managed effectively.

Appendix C

Critique of the design and functionality of the MAS website

This appendix is not designed to be read in its entirety. It constitutes evidence for our statement that website design and functionality are inadequate, and is specific and detailed for that reason.

1. General Design Themes

1.1. The site is not well written for the web: too many words, not enough text-related links, paragraphs not short enough, text when lists or bullets would be better, main points put at the end of sections instead of the beginning.

1.2. Every page contains a lot of links- often too many with no particular indication of why those have been chosen. Some pages are little more than lists of links, which can lead to linking through more than one page to get to a destination (e.g. from ‘Renting a home’ - for some reason included under ‘life-stage guides’ and not ‘mortgages and homes’ – a click on ‘dealing with problems’ takes you to a mystery tab (in fact an opening out of the first tab) and that tab gives a couple of sentences and then a link to the external advice site (Directgov)

1.3. There is no logical structure to the information. Fundamental themes (e.g risk, reward, balance of income and spending, personal preferences, taxation) are either not explained at all or muddled up with specific subjects (dealing with debt, investing, pensions). See ‘top tabs layout’ below

1.4. Because of this lack of logic it’s hard to find remembered pages (try finding ‘Problems with Rent’ as in 2 above without the clues given there).

1.5. Links with the same title sometimes go to different places = eg ‘Savings and Investment’ on the ‘Retirement’ page goes to a pdf leaflet and in other places goes to a different web page.

1.6. Links shouldn’t go to leaflets unless described as ‘view the leaflet/pdf on XYZ’. In general too much use is made of links to leaflets - exposing the misconception that writing for the Web is the same as writing guides.

1.7. The design of the home page is confusing and unwelcoming. The large top banner that fades and changes is a designer’s conceit that is particularly irritating. There are links all over the place in different formats: the line of tabs along the top; the four big ones at the bottom (two of them are also main tabs, two are not); a big section on ‘Tools and planners’ with symbols (eg a baby for the baby calculator), presumably for those who can’t read the word ‘baby’. Plus a news section that’s completely irrelevant for anyone seeking advice.

1.8. This home page design is repeated for some of the sub-sections, simply interposing an irrelevant link page that obstructs the seeker of information.

1.9. There should be a colour-coded way of knowing where you are at the second level of tabs (as there is at the top level).

2. Structure

2.1. The site seems to have no coherent structure or aiming point. If it’s aimed at money advice for the general public then it is quite inappropriate to have as main tabs the MAS corporate structure and governance (About us) or a general news feed (News) – (see ‘Top tabs layout’ below).

2.2. There are no learning pathways through the site, with destinations and information determined by the individual needs and circumstances of the user. It’s basically just a list of headings.

2.3. It is odd that the Health Check is not integrated into the site. This despite a large part of the right margin of most pages being taken up with a link to it., so it’s obviously considered a key entry point for use of the site. The two should interact, but each appears to have been separately developed.

3. Health Check

3.1. Design on the answer pages is clunky. Banner on the left is irrelevant and distracting. Pages shouldn’t have separate next/previous buttons but should move on clicking the answer. Buttons too low - shouldn’t fall off the bottom of the page. Answer boxes far too big, the whole layout needs condensing.

3.2. System for checking and/or correcting answers crude and not obvious on the page. Separate links for ‘checking your answers’ (which you cannot alter) and ‘changing your answers’ (which you can) is ridiculous.

3.3. ‘Save your action plan’ requires a unique email address, though the instructions refer to a user name that isn’t referenced.

3.4. After doing health check no easy exit (like returning to the home page). Small not-obvious link opens home page in new window so you’ve got two windows open instead of one.

3.5. Health Check on the whole has no specific advice that couldn’t be given by a direct Q&A (eg wills). Needs links to the specific advice sections on the site – tellingly there are few.

4. Top tabs layout

4.1. The layout of the top tabs is another key point of entry, so its structure is important. The tabs read, in order: ‘Home’, ‘Your Money’, ‘Parent’s guide to money’, ‘Divorce & separation’, ‘Tools & Planners’, ‘News’, ‘About us’, ‘Working with us’.

4.1.1. The ‘Home’ page is just a link page (nothing wrong with that).

4.1.2. The content of ‘News’ and ‘About us’ has strayed out of a corporate website: it is irrelevant to the individual seeking advice.

4.1.3. The content of ‘Working with us’ is such a muddle that it is not even clear whether it’s trying to promote MAS to employers or give advice to employees. (The prose is turgid, e.g.: ‘We can most effectively support young people, and the organisations that work with them, by leading thought around the most effective ways to deliver financial education that creates positive behaviours in the long term.’)

4.1.4. ‘Tools and planners’ is a sensible tab but is, as it says, just a toolbox. That leaves only three tabs as the top tier of advice: ‘Your money’, ‘Parent’s guide to money’, ‘Divorce & separation’.

4.1.5. ‘Divorce and separation’ has no place as a major tab. We acknowledge the importance of ‘Parents’. But if the top layer of tabs is to be structured by life position, where are ‘Living alone’, ‘Retirement’, ‘Couples without dependents’, ‘In Care’……? In short, where do un-separated childless people go?

4.2. ‘Your money’ is clearly important and worth a separate look.

5. ‘Your Money’ tab

5.1. Here we find the next level of tabs to be: ‘Everyday money’, ‘Life, work and study’, ‘Savings & investments’, ‘Insurance’, ‘Mortgages & homes’, ‘Pensions & retirement’, ‘Cards & loans’, ‘Tools & planners, ‘Free printed guides’.

5.2. We’ve now got two ‘Tools & planners’ tabs on the screen at two different levels. They go to the same places but, confusingly, via two different sub-home pages.

5.3. A separate tab for ‘Free printed guides’ makes no sense if the site is properly planned. It is, however, essential in this case because many of the individual pages relevant to the guides do not include links to them.

5.4. ‘Life, work & study’ is an unhelpful title that mirrors the confusion of it’s content. If it was called ‘Life stage guides’, structured accordingly, and made a main tab it could become one of the key signposts guiding people to the right part of the site for them.

5.5. ‘Everyday money’ ought to be the portal which delivers an overview of the financial issues relevant to individuals and a roadmap for further progress through the site. But it’s an illogical mess. As evidence we’ll simply list the sub-headings:

5.5.1. The tab list on the left margin is: ‘Bank accounts’, ‘Compensation’, ‘Dealing with debt’, ‘Getting financial advice’, ‘Lifestage guides’

5.5.2. At the bottom is another tab list headed ‘Need to Know’ comprising: ‘Dealing with debt’, ‘Bank accounts table (pdf)’, ‘Account switching guide (Bacs)’, ‘Sending money overseas’, ‘Living and working in the UK (MyUKinfo). [The words in the brackets are reproduced as shown]

6. Calculation aids

The baby cost calculator is singled out for special mention in the 2012-13 Plan, so let it be representative of all.

It’s a list of baby expenses – 11 of them. Put values to each, it adds them up. That’s helpful. But the execution is clunky. There are some confusing sliders to set values instead of simple boxes to type values in. There’s a question page to begin which pre-sets the sliders to high/medium/low values. The ability to pre-set is a good idea but the execution is not. There’s no provision to add other baby cost expenses not in the list, or to export results. Properly designed, the whole thing could be put clearly on one page without losing the nice high/medium/low pre-sets.

Try it for yourself.

7. Comparison tables


These are noticeably cruder than the commercially available alternatives and do not seem to be exhaustive. They are not supported by any particular commentary or description of the headings, and it strikes us that this implied endorsement of a method of choosing products based on a few listed characteristics is a mistake.

June 2012

Appendix D

Critique of Content of MAS website

This appendix is not designed to be read in its entirety. It constitutes evidence for our statement that website content is unreliable, thus also calling into question the reliability of advice delivered through other channels.

8. General style

8.1. There is a tendency to avoid direct advice but to deliver lists of warnings (‘think about this’, ‘be careful about that’). These are sometimes helpful, but not much use to those who want to know what to actually do.

8.2. By failing to explain the underlying principles of dealing with money, the site does not give the individual the tools to make his own informed decisions, or the knowledge framework to seek further advice.

9. Specifically wrong advice

9.1. Description of investments

9.1.1. The description of investments is incomprehensible – only if you know the answer can you understand what the writer is trying to express:

‘You may have heard of all sorts of investments – ISAs, shares, property, unit trusts – the list goes on. However, the best way to understand investments is to think about them as having three 'layers':

· Asset class . This is the underlying investment. There are four main asset classes – cash , bonds , shares and property . You can invest in each of these directly if you wish.

· Pooled investments . This is when you pool your money with money from other investors to invest in one or more of the above asset classes. This can help spread your risk and save on costs. Open-ended investment funds, investment trusts and life assurance bonds are the most common pooled investments.

· Tax wrappers . These are tax breaks that you can – subject to certain rules – wrap around your investment, to shield it from some or all tax. The wrapper can be around either the underlying investment (such as shares or bonds) or the pooled investment. Two of the most common tax wrappers are ISAs and pensions’

So, I understand the three different concepts but not how they are connected as ‘layers’. If an ISA is a tax wrapper (correct), how can it frequently be described elsewhere (indeed in the adjoining left panel) as an investment (incorrect)?

9.1.2. The way to lay this out, after introducing the idea of asset classes, is to help the saver decide on his asset allocation. Only then should he consider the best way to execute this, making use of pooled investments, if appropriate, and tax wrappers, if appropriate.

9.1.3. The statement that pooled investments save on costs is just wrong.

9.1.4. The panel of links on the left vertical menu lists nine types of investment, three of which are spread-betting, contracts-for-difference (where do they lie in the three layers?) and land-banking. It does not mention hedge funds, premium bonds, National Savings, infrastructure, overseas investing, gold, other commodities, EIS (though VCTs are there), currencies……..

9.1.5. The advice takes the conventional course of making a distinction between Savings and Investments. ‘There are two ways to save – short term and long term. Savings accounts are for times when you may need to get at your money quickly. They’re different from investments, which are really for the longer term’. So what’s a ‘contract for difference’ then? Or a 5-year fixed interest cash deposit with no withdrawal options? Or, indeed, a share in Vodafone, which is immediately fungible?

9.2. On inflation

9.2.1. The tabs describing cash deposits or money investments invariably describe them as ‘low-risk’. There is no mention of inflation, or link to the (brief and superficial) mention of inflation risk elsewhere on the site. When it comes to that section we find:

‘Inflation happens when prices go up throughout an economy. The effect of inflation on your money means that the money you save will buy less each year. To protect your savings against this, you should look for an after-tax interest rate that is more than the rate of inflation.’

First, the general description needs a far clearer explanation than it gets. Second, the last sentence is so superficial as to be close to wrong. If historical inflation is 2% and I put my money in a variable rate cash account at 2.5% have I ‘protected myself against inflation’?

Following that we have: ‘Or if you want to put your money away for a longer period and are prepared to take the risk that your money could fall in value (as well as rise), you could put some into an investment linked to the stock market.’ We understand what the writer is trying to say, but he hasn’t said it. What does ‘taking the risk that your money could fall in value’ mean in the context of a stock market investment? Sounds like inflation to me. Why the word ‘linked’?

9.2.2. That last sentence ends the inflation advice. There is no link to it’s own page: ‘Inflation-linked Products’. Scandalously, that page only mentions ‘products’, but not National Savings Index-linked investments or government index-linked bonds? These are in fact perfect hedges over the described period (provided your basket of goods is the same as that backing the RPI or CPI) and it’s incompetent not to mention them.

9.2.3. The page includes the advice: ‘Remember too that the rate of inflation can fall as well as rise, so the return you get might be less than the rate you saw advertised’. Nobody who understands the investment purpose behind inflation protection could write that sentence.

9.3. On risk and return

9.3.1. ‘Liquidity, ‘Risk’ and ‘Return’ are the three pillars of the savings decision. Risk, particularly, is widely misunderstood but not difficult to explain (provided the different types of risk are carved out and explained separately). This site does not do so, despite many references. Without that, the question ‘What is your attitude to risk?’ – beloved of IFAs wanting to discover which product to sell you, and used on this site – is quite frankly meaningless, and therefore discouraging.

9.3.2. There is no explanation of ‘Return’ either, or even of ‘Interest’ in any helpful way. The page on credit cards has no mention of interest (apart from the fact that it would be charged) and no links to anything to help understand how it works or the effect of different rates, particularly rolled up over time, and no suggestion that credit card borrowing should be a last resort.

9.3.3. There is no mention of cost drag – probably second only to ‘diversification’ as the most important single factor the long-term saver should understand.

9.4. Dealing with debt

9.4.1. The treatment is superficial. The master page divides enquirers into two classes: ‘Struggling’ or ‘Managing’. Fair enough. But if you are ‘struggling’ you are directed to a page that gives the advice that you should seek advice. If you are not struggling you are directed to a page that gives some very simple advice on managing your money (budget, watch your spending, etc). Within that page, under the heading ‘getting into difficulties’ you are given two choices – either seek advice (again) or link to ‘Dealing with Debt’. And that takes you back to the master debt page (‘Struggling’ or ‘Managing’?).

9.4.2. There is nothing at all about the different types of debt, the various consolidation or negotiation options or how to plan your way out of it. That would be OK if clear advice was given on how to apply for free help from the various agencies that offer it, but it is not. Links to five of them are given without comment.

9.4.3. This is slightly odd because the Health Check includes some quite helpful general points about debt that could usefully be linked here.

9.5. Health Check – minor error

9.5.1. The Health Check sometimes delivers the message ‘It’s reassuring to know you have enough money put by to deal with the unexpected’ when the profile does not justify it.

June 2012

Prepared 15th June 2012