A not so civil servant

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So, Caroline Rookes has concerns over “adviser ethics”. This is an astonishing statement to make. The head of a quango set up to promote financial capability has said, in effect, that she thinks that the advice profession is crooked: or did I hear this wrongly?

No acknowledgement of the huge steps made towards professional development. No nod towards the removal of commission. Just a crass statement about how tough the FCA will be on advisers who get it wrong. Should we be “afraid” again?

I wonder if Ms Rookes remembers that one of the MAS’s statutory objectives is “promoting awareness of the benefits of financial planning”?

The Emperor’s new clothes

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Although I am a staunch supporter of the Pension changes, readers of this blog will know that I have been very concerned about the “Guidance Guarantee” and the potential for this to be delivered badly and without sufficient recourse to full advice.

The Government’s announcement that TPAS and MAS will be selected to deliver guidance is possibly the worse outcome imaginable. As an organisation, MAS has been rightly criticised for its performance and is currently undergoing a review requisitioned by the Treasury Select Committee. How then is it credible that they are given more work to do?

The Government’s Guidance Camel

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If a camel is a horse designed by a committee then we should not be surprised if the final guidance proposals end up looking like the westward elevation of an eastbound camel.

A quick sift through the suggestions of some of the providers reveals the usual set of self interests and pet hobby horses. Amazingly, APFA, rather than promote the cause of advisers wants an independent 3rd party like MAS or TPAS to deliver the guarantee. As Terry Wogan might say, “is it me?”.

Yes Minister!

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Even Sir Humphrey would confess himself surprised at the latest shenanigans emanating from Whitehall. One of Sir Humphrey’s favoured tactics to block Jim Hacker’s schemes was to set up an inter-departmental enquiry to examine the proposals. The only certain outcome was a delay of 18 months and the probability that the minister would have moved on and his scheme could be quietly dropped.

Why the Money Advice Service must change

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In the real world, businesses set their objectives with a rigorous examination of the benefits, the resources available and the likelihood of achieving them. Very often plans have to be changed and difficult decisions taken to ensure that the business remains viable. Above all the shareholders of the business will hold management accountable to ensuring that plans are sensible and that they are delivered.

In the fantasy land of the Money Advice Service (MAS) none of this seems to apply. When a Quango acquires a statutory objective, they also get a key to the money printing press. Their budget for 2012-13 of £80.8m is their estimate of what they need to deliver the objectives given to them.