Government Advice

There’s a lot of it. Just don’t expect anything that impacts the profits of the Financial Services Industry.

…and its not ‘advice’ either. Government only claims to supply ‘guidance’ - to avoid upsetting the advice industry.

Government has always been aware of its responsibilities to help people in the financial jungle, but struggles with conflicting objectives. So you will find nothing in any government site on two of the largest drags on building a savings pot:-

  1. The compounding effect of quite small ad valorem percentage fund charges, or
  2. The conflict of interest inherent in ‘tied’ advice or the many other ways in which the open-mindedness of advisers can be corrupted by commercial arrangements..

Government financial guidance always manages to fragment. This despite the ‘Financial Guidance and Claims Act 2018’ which enabled a ‘single financial guidance body (SFGB)’. There are four names (or ‘brands’) involved.

Money & Pensions Service (MaPS)

This is the SFGB. Describes itself as ‘an arm’s-length body sponsored by the Department for Work and Pensions and also engages with HM Treasury on policy matters relating to financial capability and debt advice’. A typical civil service description of mind-numbing ambiguity. Doesn’t mention the Financial Conduct Authority (FCA) towards which it has certain obligations under the Act. Does not provide guidance directly, but links to its declared ‘MoneyHelper’ brand.

MoneyHelper

Provides useful information under eight headings, one of which is ‘Savings’. This hides a subsection - ‘investments’. Clearly written but basically a whole stream of questions, many of them warnings, with often incomplete answers (e.g. 'think about…..'). If you are ‘unsure about whether to invest your money or don’t know where to start’ you are directed to another site - ‘InvestSmart’.

InvestSmart

Part of the FCA. Overlaps with MoneyHelper. Yet another essay on some, but not all, investment issues and likely to be read only by those with a working knowledge of the issues. Would be incomprehensible to the beginner. E.g. ‘Do you understand your risk profile?’ Honest advice but:-

  • does not mention pensions,
  • does not mention its connection to MoneyHelper,
  • no numbers,
  • no explanation of the importance of expenses,
  • no explanation of the advice industry.

In general, lacks of awareness of the importance of consumer learning for advancing consumer protection - now the FCA's primary objective.

Pension Wise

A grand name for what is a single service – a free one-hour session of telephone advice. We have no experience of it but anything that’s free can’t be all bad. It appears to be under the MoneyHelper umbrella. However the small print says ‘the providers of Pension Wise Guidance are MaPS and the Citizens Advice Bureaux’.

Our Summary

So, four different names, overlapping functions, confusion for the individual. Honest endeavour, but it is hard not to believe that their heart is not in it. Can it be because improving the money-management capabilities of ordinary people would allow us to pass up the less helpful offers of the industry (see Fixed-Sum-Game)?

Stop press! We have just (2023) discovered a fifth government site headed 'Retirement Planning' with URL https://www.yourpension.gov.uk/. It tries to be helpful but just contains motherhood - with all the smell of a government department that feels it needs to make a gesture. The result is yet more duplication and yet more confusion.