The Financial Services Consumer Panel is worried that people will find it harder to get impartial financial guidance with the loss of the Money Advice Service.
The consumer body reckoned that binning the body made no sense after building up the brand name, with 8.4 million people contacting the service in 2014/2015, double the previous year.
The service – which was criticised for delivering poor value for money – was scrapped in the March Budget and will be merged with The Pensions Advisory Service and Pension Wise.
Sue Lewis, chair of the Financial Services Consumer Panel, said: The government has not explained how abolishing the MAS brand will improve consumer outcomes, nor said why it has rejected less disruptive options, such as strengthening MAS’s governance.
“MAS has been widely criticised in the past for its marketing spend, but the brand is now well known, and trusted. Losing it will leave millions of consumers unable to find impartial guidance, and the money spent on building the brand will have been wasted.
“The government appears to expect the MAS successor body to take responsibility for improving financial capability, but without saying where leadership for the UK strategy should lie, or what the governance arrangements should be.
“There are real risks for consumers in these proposals and we hope the government will consider the evidence carefully, including experience from overseas, before taking hasty and damaging action.”
Yesterday the Association of Professional Financial Advisers called for clarity in how the Treasury will fund the new body.
Chris Hannant, director general of the body, said: “We lack clarity on funding. Part of the government’s rationale was to make cost savings and we would like assurances that the new set-up will lead to future reductions in the cost of public financial guidance.”