Description of the programme

In March 2009 the Financial Services Authority (FSA) set up the ‘Money Guidance Pathfinder’ service as part of its strategy to raise levels of financial capability in the UK. In its first year it delivered around 570,000 advice sessions to an estimated 220,700 people.

It operated in the North East and North West of England, targeted to people aged 25-54 from lower socio-economic groups who were considered most vulnerable to the consequences of poor financial decision making.

The advice services provides covered nine areas:

• Budgeting and money management
• Saving and investing
• Borrowing and debt management
• Retirement planning and pensions
• Mortgages
• Protecting and insuring the individual and family
• Taxation
• Social security and tax credits, and
• Translating technical financial language into a language ordinary people understand (‘jargon busting’).

Money Guidance involved 1:1 information and guidance delivered through multiple channels: face-to-face, telephone and a website (moneymadeclear). Average session length was 37 minutes for face-to-face and 20 minutes by phone. People visited the website on average for six minutes, combining this with visits to other advice websites.

The service intended to provide information and guidance but not regulated financial advice.

The study

An evaluation of the programme was produced by the Personal Finance Research Centre at the University of Bristol. The evaluation analysed data sources including surveys conducted within one week of service use, and a follow up conducted around two months later. The results were compared with those from a control group of individuals who had sought information or advice from other sources.

Key findings

The evaluation found that positive impacts were achieved in relation to a number of outcomes:

• After two months a minority of users reported financial gains.
• Users of face-to-face providers were more likely to report financial gains (20%) than either telephone or website users (10%), however the average financial gain was highest among website users.

• Most users said they received all the information and guidance they required and that it had been important in helping them decide what to do (this response was lowest for telephone users).
• Two months after using the service a substantial proportion of users of all three channels said they had acted on the information and guidance.
• Actions included taking out or changing financial products, pursuing debt solutions and starting to budget.
• The likelihood of acting was highest amongst face-to-face service users (62%), and lowest amongst website users (however 50% reported taking some action).
• The main predictor of taking action was not the delivery channel but the type of enquiry. Those enquiring about budgeting and money management, debt problems and arrears or social security benefits were most likely to act.

• Two months after they had used Money Guidance there were identifiable improvements in levels of financial capability among face-to-face users.
• The greatest improvements were seen in relation to being able to make ends meet and choosing products.
• Users of the telephone service and website did not experience similar improvements, nor did users of other providers.
• However, users of face-to-face providers often had much lower financial capability scores when they first sought information and guidance.

• Users of face-to-face services generally belonged to lower socio-economic groups and were most vulnerable to the consequences of poor financial decision-making. Face-to-face service providers dealt with the largest proportion of enquiries relating to debt, budgeting and social security/tax credits, and the smallest proportion of enquiries relating to product choice/best buys, resolving complaints and other non-debt problems and general product enquiries.
• Users of the telephone services best reflected general information seekers. They had the highest proportion of enquiries about resolving non-debt related problems but the lowest proportion relating to budgeting.
• Website users tended to be more affluent and least vulnerable to the consequences of poor financial decision-making. The website was most often used for product choice/best buy enquiries (particularly savings and investments) and also for general product enquiries. It was used least for debt problems or social security/tax credit enquiries.

Points to consider

Assessment of the quality of assistance given to customers was that it was high, and higher for face-to-face advice compared to telephone assistance. Areas for improvement were identified, including the tendency of some Guides to take enquiries at face value and not go beyond enquirers' presenting issue; the provision of incomplete information, and the failure in some instances to provide enquirers with a summary of action points.

The report concludes that all three channels (face-to-face, telephone and digital) were required in order to provide a comprehensive service.

Full report

FSA and UK Government's 'Money Guidance Pathfinder' - full report