Earlier this year, the Money Advice Service was set up, replacing the Consumer Financial Education Body and offering financial guidance over the internet and by phone.
Upon its launch, we decided to give it a call in a mystery shopping exercise and were pleasantly surprised by the quality of the service and its promotion of independent financial advice.
Now the service has rolled out its latest offering: a health check which promises to help users make the most of their money, giving them an action plan and "clear goals".
IFAonline decided to once again give the Money Advice Service a go...
The health check is built around 17 questions, with no need to give details such as names, addresses or contact details.
They range from "are you married or living with a partner?" and "how old are you?", to "how much do you rely on borrowing, including any overdrafts, loans or cards but not any student loans?" and "how would you deal with an unexpected cost that you couldn't afford to pay for yourself?".
All were answered in a multiple choice format and none required more than few moments thought. They did not feel particularly intrusive, especially as I was completely anonymous.
At the end of the questions section came perhaps the most important part for financial advisers. The disclaimer:
"We're not regulated by the Financial Services Authority so we can't give you a specific recommendation on whether a particular product is suitable for you. If you need regulated financial advice, consult a professional financial adviser."
Of course, this is the part which has also caused the most controversy, particularly as it contrasts with what we have always considered "advice" to be.
The personal action plan
Now that the service had all the details it needed, it formulated a "personal action plan" for me, outlining what I need to do and giving a few pointers.
In the summary, most of it was common sense: "build up some emergency savings", "review your retirement plans" and "make plans in case you die".
Not necessarily earth-shattering and probably the sort of messages an independent financial adviser delivers every day.
The more detailed plan outlined the importance of income protection and critical illness cover, while also urging users to find out what their state pension will be and what their employer might be offering.
Within every section, there was also a suggestion that the reader should consult a financial adviser if they want regulated advice which takes into account their personal circumstances.
We gave a cautious thumbs up to the money advice service when it launched and would do the same for the new health check.
It does what it says on the tin and may alert users to aspects of their personal finance and future plans which they might not have thought about.
Importantly, it also stresses the importance of professional financial advice.
Of course, it remains unfortunate the government and FSA insisted on keeping the work "advice" in its name, something which could cause confusion between regulated and unregulated services.
Once again, we would urge readers to try it out for themselves to find out whether they are asking the right questions and if the "advice" being given is sensible.
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