Julian Knight: Money Advice Service needs more than cash

The MAS's head has quit, but the agency needs an overhaul to reach those who need its help

Under pressure from the head of the Financial Services Authority, a highly paid executive resigned last week.

No, I am not talking about Barclays' Bob Diamond but Tony Hobman, the chief executive of the troubled Money Advice Service.

It was obvious that Mr Hobman's time was up when the FSA's chairman, Lord Turner, recently described his £350,000 salary to MPs as "set somewhat too high"; that's about as damning as it gets in Turner speak.

Mr Hobman's tenure has been marked by staff, brought in on high salaries, being made redundant and the building of a website quite breathtaking in the patronising nature of its content. Nevertheless, around £20m has been spent promoting the site and the MAS.

And have you ever heard of it? Even the front page of the website recognises that it is failing; imploring users to be one of the "thousands of people" who have taken the offered financial health check. In web terms, thousands are nowhere, millions is where it is at.

The MAS is a government inspired project, worthy, of course, in its aims and joyously spending money like it's still 2007. But you can't just build a website, stick some adverts on the telly and hope people come; you need to really think about the way you are engaging with people, across social media and offering a real route for user expression – that's what works with sites like Moneysavingexpert. com. Forget the disclaimers and the words by committee.

But in many respects the MAS is on a losing wicket. It is trying to replace honest, thoughtful advice which has been destroyed by the moral decline of the financial services sector. In the 1970s bankers took exams including a section on ethics, now they are sending emails to each other promising bottles of Bollinger in return for ripping us all off.

The idea of the MAS was to give people a destination to find impartial advice in a financial world that has become morally warped but it's this culture that needs to be addressed. In the 10 days following the Libor scandal (banking's own Millie Dowler hacking moment), I think we as a nation have finally got the message, let's see where that takes us.

FSA fines

I understand why they do it but for the Financial Services Authority to discount large financial institutions £67m in fines in just two and a half years for simply being deemed to have co-operated sends out the wrong message (see page 90).

Even in the most recent case involving Barclays, the FSA gave its usual 30 per cent discount on the fine, yet the US authorities didn't and that highlights an important point. If you rip people off in the US and get caught there is a good chance that you will be led away in handcuffs. Do it in the UK and you will almost invariably get a discounted fine.

One bank was hauled up in front of the beak three times and each time had their fine discounted because they co-operated. Co-operation should be a given, a basic starting point. We highlighted the practice of discounting fines back in 2008 and for a few months the FSA seemed to be less generous about its discounting – it was focusing at the time on a lot of individual cases of mortgage fraud rather than fining big institutions. But it's back to its old approach.

More pain for pensioners

Another £50bn of quantitative easing has been announced. This was hardly unexpected with the UK economy likely to have been shown to have shrunk again in the second quarter of 2012, but nonetheless it's hugely damaging for pensioners up and down the country.

Since the Bank of England started printing money in 2009, the average annual annuity income received by a 65-year-old male on a £100,000 pension pot has shrunk by £1,000. And with £50bn more about to flood the market and depress the price of the main assets used to pay for an annuity this is only going to get worse.

We are literally destroying the savings of the elderly in order to give money to the banks, with very dubious economic benefit.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
footballLIVE City face Stoke, while Warnock returns to Palace dugout
Life and Style
3D printed bump keys can access almost any lock
gadgets + techSoftware needs photo of lock and not much more
Paul McCartney backs the
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Mario Balotelli pictured in his Liverpool shirt for the first time
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

    £35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

    DevOps Engineer (Systems Administration, Linux, Shell, Bash)

    £50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

    Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

    £60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

    Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

    £50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone