Ann Foster, who takes over today as the financial watchdog's consumer watchdog, is calling on the Government to set up a nationwide chain of stand-alone money advice centres which people can turn to.
In an exclusive interview with The Independent, Ms Foster said: "I regard this as the single most important measure to help consumers. Unless they can get access to independent advice before they buy, they cannot make important financial decisions with confidence."
Ms Foster, who has spent most of her career with the National and Scottish Consumer Councils, has become chairman of the Financial Services Consumer Panel (FSCP), which the Financial Services Authority (FSA) was legally obliged to set up to look after consumers' interests.
But although it is FSA-financed and has its offices in the FSA Canary Wharf headquarters in east London, the FSCP has been fiercely independent, and looks like becoming even more so under the redoubtable Ms Foster. She is taking office a month after Callum McCarthy and John Tiner were appointed the FSA's chairman and chief executive respectively, so a fresh breeze is blowing through both organisations.
Ms Foster said: "I think the government and the FSA should be investigating generic advice centres. It could save people lots of money if they were made aware of such centres and automatically visited them before going ahead with a financial proposal. We have an extremely good debt advice service in this country, led by Citizens Advice, but they are sorting out problems which have already arisen.
"We want to see a service that is not necessarily sorting out problems, but giving general advice to people who, for example, might be trying to decide whether to invest in a pension or pay off a mortgage. It's prevention rather than cure for people who don't think of going to independent financial advisers." The FSA has said it intends to launch a financial health check service next year, but this will be limited to an interactive internet site which many people would find daunting.
In August , Vince Cable, the Liberal Democrats' shadow Chancellor said: "If the FSA is to go ahead, it is imperative that a network is created providing high quality, independent, generic financial advice."
But Ms Foster accepts that it would be difficult for the FSA to form such a network, because its money comes entirely from the financial services industry and the cost could dwarf the £170m a year it levies. Asked about the advice chain plan, an FSA spokesman said last night: "It's not on our agenda at present. There is no way we could fund it, so it becomes a political decision for the Government."
Ms Foster cited the case of the Birmingham Settlement, which is indirectly backed by the leading banks and has a free community money advice centre where people can drop in on a first come, first served basis.
The Treasury's official stance is to concentrate on developing a series of allegedly foolproof financial products people could buy without advice. This was the recommendation of last year's Sandler report, which is to be implemented next year. But Ms Foster, who says her plan would dovetail with The Independent's call for the Government to improve financial education, pointed out: "You can make products simple, but people need to know if this is the right thing for them. People don't know about concepts such as 'appetite for risk', or even short, medium or long-term savings. What they think about is whether they can afford a holiday, a son or daughter's wedding or a pension. My view is that Sandler has been tackled the wrong way round: you need to educate the public, but that is a very long-term exercise.
"I am sure there are a lot of people, disappointed in their pensions and sitting in houses that are worth far more than they expected. They need to be aware of the pitfalls of equity release. It would be handy if they could go to someone, ask sensible questions and talk about their situation. They are up against a huge, very well-informed industry."
The FSCP has pointed to the lack of strategy in the FSA's approach to education. Mr Tiner is addressing the problem by setting up a financial capability steering group, but they will find Ms Foster snapping at their heels.
She said: "We have had educational campaigns with a lot of money behind them that have not been successful. It's about keeping the message simple and getting it to people when they need to know about it."
The financial services industry has financed most of the education initiatives so far, although some companies question whether generic campaigns can be justified in terms of the return to their shareholders. But Ms Foster believes a commitment to education is not enough.
She said: "It's not a substitute for marketing products that can be clearly understood. We are in favour of creating confident consumers, but there is a responsibility on providers. People have to understand what they are doing when something is being sold to them. It's difficult for consumers to know what to think when dependable high street names are convicted of mis-selling."
Ms Foster clearly intends to make sure Messrs McCarthy and Tiner know she is keeping an eye on them.
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