Don’t bank on online advice

Informed Choice chartered financial planner Martin Bamford was featured in The Independent today, talking about the Money Advice Service.

The Money Advice Service was set up by Government to provide ‘free’ financial information and guidance, primarily to lower earners who cannot afford to engage with a financial adviser.

It has caused a lot of fuss in the retail financial services sector this week, as their new national television advertising campaign made erroneous references to providing ‘free’ ‘independent’ and ‘unbiased advice’.

Independent Financial Advisers were already unhappy at the prospect for confusion with the Money Advice Service using the word ‘Advice’ to describe what they do, rather than the more appropriate word ‘Guidance’.

Commenting in The Independent today, Martin said:

“Using the word ‘advice’ is both confusing and misleading,” says Martin Bamford, managing director of the independent financial planners Informed Choice. “What they have to offer is guidance, not advice.”

Looking at the cost of the Money Advice Service, which is being promoted to consumers as ‘free’ and ‘set up by government’, Martin said:

“The service definitely isn’t ‘free’ as it costs the sector £47.3m to fund it. In fact, I received my FSA invoice this week, which included a cost of £1,135.53 for the Money Advice Service!”

We believe that the Money Advice Service has an important role to play and can make a valuable contribution to the financial education of millions of consumers.

What we would hope to see is a clarification around the meaning of the word ‘advice’ and a better explanation that, whilst the Money Advice Service is free at the point of use, it is wholly funded by regulated financial services firms.

You can read the Independent article in full here.