CML to object to 1,300 pc levy increase
The association said that the Financial Service Authority’s 1,309% increase to the funding levy for 2013/14 is fundamentally flawed and should not have been published without prior consultation with the industry.
The main point of contention relates to the formula used to calculate funding which measures the number of interactions between consumers and MAS.
The CML said that it believes the formula is too simplistic and does not distinguish between the different levels of advice.
For instance 11% of MAS’s public contact comes from the use of its mortgage calculator which the association said “cannot be interpreted as a need for tailored money advice.”
The CML said: “Our members do much to engage with independent money advice providers as part of their efforts to assist customers in financial difficulty.
“But, without some basic and consistent measures of performance, the ability of firms to see the value of debt advice – both for themselves and for consumers – is impaired.
“The lack of data (which needs to be presented in a consistent and regular fashion) makes it difficult to compare the MAS with other organisations and focus on the development of good practice.
“It also presents difficulties for lenders and, we assume, for the MAS itself in its efforts to co-ordinate the sector. Without being able to measure the value of debt advice, it is harder for lenders to justify their continuing support for the service.”
The CML also warned that should the proposed increase be ratified lenders could find themselves less able to fund money advice initiatives elsewhere.
The association added: “This could have an effect on areas falling outside of the MAS target audience but where there may still be a need for advice.”