When is ‘advice’ not ‘advice’?
Today sees the launch of The Money Advice Service, which replaces the Consumer Financial Education Body (CFEB).
The service is run by government and funded by a levy on regulated financial services firms, including Informed Choice. We expect to pay in the region of £900 towards the cost of funding this enterprise this year.
The Money Advice Service will operate centres across the UK and also offer ‘advice’ online or by telephone.
Except that The Money Advice Service does not really offer advice.
A better name for this project would have been The Money Guidance Service. There is a world of difference between advice, which is specific and regulated, and information or guidance.
Whilst we welcome the launch of The Money Advice Service, as it will help a large number of people each year who have been historically disenfranchised by the financial services sector, we believe that using the word advice in the name is potentially misleading.
What The Money Advice Service will not be able to do is recommend a specific course of action or a financial product. It will be able to provide information and guidance to people, to help them to make their own decisions around basic money issues, such as budgeting or managing debt.
Where people have specific advice or financial planning requirements, they will still need to engage with a professional independent financial adviser.
We hope that The Money Advice Service will succeed in its aims “by giving clear, unbiased money advice to help people make informed choices”, only in part because we are always flattered by others making reference to our own company name in their mission statements!!