Citizens Advice, the advisory charity with 2,800 bureaux around the country, has linked up with Andrew Smith's Department of Work & Pensions (DWP), Barclays bank and IFA bodies to provide free financial advice to the public.
Citizens Advice, the advisory charity with 2,800 bureaux around the country, has linked up with Andrew Smith's Department of Work & Pensions (DWP), Barclays bank and IFA bodies to provide free financial advice to the public. It is believed to be the first time a national not-for-profit charity has joined the money industry to tackle the gap in the provision of financial advice among the less well-off.
The six-month pilot scheme will begin with nine Citizens Advice Bureaux (CABs) working in collaboration with independent financial advisors to provide independent and impartial advice.
David Harker, Citizens Advice chief executive, said: "There is an acknowledged problem in low and middle-income groups accessing the financial advice they need. They are reticent to use financial advisers because of their inability to afford many financial products and because of a lack of trust. As front-line advice providers, CABs across the country report that they are facing an increasing demand for financial advice, but they are finding it difficult to meet this surge with their current resources."
CABs receive one million new debt enquiries every year and almost five million other enquiries on issues from welfare benefits to tax credits.
"This project aims to identify ways to ensure that consumers are better informed and advised on financial issues," said Mr Harker, "so they can both find solutions to their problems and better make the financial choices that are best for them and their families."
One object will be to evaluate whether links between CABs and IFAs - similar to a pro bono legal advice scheme offered by solicitors via CABs - can meet this demand. It follows a joint survey of bureaux commissioned by Citizens Advice and the Financial Services Authority (FSA) that found that CAB clients are in need of generic financial advice. The study involved questionnaires and interviews with bureaux advisers and clients. It found that eight out of 10 CAB advisers were asked about financial issues at least fortnightly, with debt and benefit queries topping the list, followed by banking, borrowing and savings.
The project is being led by a steering group including the DWP, HM Treasury, the FSA, the Society of Financial Advisers (Sofa), the Association of Independent Financial Advisers and Barclays. The £90,000 funding has come from Barclays, Sofa and the Tudor Trust charity.
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