The replacement for the Money Advice Service must have a better referral system towards professional advisers.

That was the view of The Association of Professional Financial Advisers, which has submitted a formal response to the Treasury’s review.

MAS is set to be combined with TPAS and Pension Wise before the end of 2018 to create a new organisation.

APFA said it would “emphasise the need for the new guidance body to act as a clear referral system to regulated financial advice, so that consumers who need further help can be catered for.”

The report said: “APFA believes the new body should provide a clearer and better referral system to regulated financial advice and deliver an improved service.”

MAS chief executive Caroline Rookes told Financial Planning Today in recent weeks that
MAS is looking to develop partnerships and see if there are circumstances where it can “hand people off” to Financial Planners.

Ms Rookes said: “Maybe Financial Planners are in that category where we need to stop and think, ‘who are the people we’re engaging with that might be the sort of people who should be going to see Financial Planners?’ And how do we get them to make that leap in the way we have done with the MAS retirement adviser directory?”

APFA wants this directory service taken over by the new body and said consumers should be referred to it.
APFA added: “It should also be highlighted that the initial conversation with an adviser is always free as the first meeting is the opportunity to discuss and, if the service is wanted, agree the fee arrangement going forward.”

APFA called for the Government to provide assurance that the new model will be “efficient and cost-effective” and that all those that supported the previous bodies continue to provide funding for the new body. The burden should not fall solely on FCA regulated entities, it said.

Chris Hannant, director general of APFA, welcomed the new body, saying it will bring “clarity and consistency for consumers and also generate efficiencies and cost-effectiveness”.

He said: “The funding model for the new body must be fair with contributions from all those that are likely to benefit – this should include those that are not regulated by the FCA.

“It will be essential that the new set-up will result in more efficient use of levy income and lead to future reductions in the cost of the new money guidance body to the financial advice community.”