Thoresen Sets Out Recommendations For A National Money Guidance Service

by Amanda Banks, Tax-News.com, London

03 March 2008

Otto Thoresen on Monday published the final report of the Thoresen Review of Generic Financial Advice.

The report sets out a high-level blueprint for a national money guidance service to provide the people of the UK with the knowledge, understanding and confidence to make better decisions about money issues. It recommends that the service should offer a combination of telephone, Internet and face-to-face guidance.

Mr Thoresen explained that:

"I believe that good money sense needs to be as much part of people's lives in the twenty-first century as healthy eating and keeping fit."

" 'Money Guidance' will help people deal with the money matters that shape their everyday lives - budgeting their weekly or monthly spending, saving and borrowing, insuring and protecting themselves and their families, retirement planning, and understanding the technical language that we in the financial services industry too often use."

"People have told us that they want and would act on this guidance. In research we commissioned 75% of people surveyed said they would use a "national information and guidance service for personal finance issues"."

"Of these, over 25% felt that they would be very likely to use this service. And evidence from our practical prototypes suggests that eight out of ten participants took at least one action within a week or so of using the service."

"Over half of these took specific action, such as buying a new product or speaking
to a regulated adviser."

Some of the recommendations contained in the report included:

• A national Money Guidance service should be governed by the principles of impartiality, supportiveness, crisis prevention, universality, and should be sales-free.
• Money Guidance provided by the service should focus on giving people information and guidance on budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits, and jargon busting. It should stop short of recommending specific products.
• A UK-wide approach to Money Guidance should be delivered using a multi-channel approach - telephone, face-to-face and web-based service.

Mr Thoresen concluded:

"My report sets out how a national money guidance service could transform people's lives as well as bringing substantial benefits to the industry and Government. Its recommendations to the Government set out a vision for how the service could be delivered."

He added: "Partnership should be at the heart of a Money Guidance service. This would allow the service to build on the expertise of existing organisations who provide help and advice to the public and are able to reach out to people in ways and places that are convenient to them."

"I have spoken to many such organisations over the past year and I know that they are keen to help."

He concluded by explaining that: "I considered whether an entirely new organisation should be set up to run Money Guidance, but concluded that in the short to medium term the FSA should take this forward. I believe it makes sense for this important initiative to be led by an organisation that is recognised as a world leader in financial capability."

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