Frank Eve is managing director of Frank Eve Consulting
Having written a number of blogs on the zombie theme it occurs to me that the financial service industry is also threatened by vampires!
In previous blogs I’ve suggested that ‘zombies’ could be defined as consumers, companies or banks that extract resources and funding from the system without returning anything back to support the economy, wealth creation or the financial services industry.
They then remain in a zombie-like state and frustrate any potential recovery.
Vampires on the other hand, are proactive companies or consumers who have a plan or story that they use to syphon off funding that could be used in other areas to support the economy or the industry. Vampires to all intent and purpose look like anyone else, they have intellect and are more proactive than zombies, creeping up on the potential victim when they least expect it.
In the mortgage industry I’d like to suggest a possible candidate in The Money Advice Service (MAS) but I’ll leave it to you to decide one way or another.
The MAS is a great concept and may have benefits for consumers but why should it be funded by the financial services industry and the financial adviser in particular? The MAS has proposed a total budget of £78.3m for 2013/14, with £43.8m allocated to money advice and £34.5m for debt advice. Some £4.6 million is currently generated from the levy on financial advisers which include mortgage brokers.
Therefore, mortgage brokers are effectively funding a competitor that has a very proactive plan and has its teeth firmly on the neck of the financial services industry.
However, the FSA is undertaking a consultation on the way that the MAS is funded and they have suggested a change in the way firms are levied to fund the Service. This could see advisers’ costs fall from £4.6m to £300,000 in total.
I could never understand why the MAS is funded in this way in the first place and it’s about time it changed. Perhaps the FSA should go a stage further and levy a small cost on those taking the advice. We could then see how the service is valued and consumer take up and outcomes could be measured a bit better.
The consultation closes on the 22nd February so make sure you have your say now.
With the Government short of cash we could soon see Zombies fighting Vampires for government funding. What do you get if a Vampire bits a Zombie? A Zompire of course.
Thanks to Rajesh Koothrappali and Big Bang Theory.