A New Breed of Debt Advisor
The Financial Conduct Authority (FCA) have said that debt advice providers must ensure they are giving clients and potential clients both suitable and appropriate advice without the intent to sell or mislead the client into the wrong solution.
The FCA’s cleansing of the Debt Management Industry will mean that those who achieve full authorisation by the FCA will be “fit for purpose”. Some of the vital ingredients are covered below:-
Staff are competent to Advice
Staff members must be competent to give advice on all appropriate solutions as well as provide helpful information to improve the financial education of clients. This needs to be evidenced in policies and procedures. At the core of these policies there should be a Training and Competence policy which sets out how staff are trained from induction through to ongoing supervision, how you monitor the quality of advice to include call listening and the completion of adequate notes. These processes are in place to identify the reasons why clients chose a particular solution and why this may or may not be the most appropriate solution.
Training needs must be monitored and delivered whilst evidence maintained such as a training log. Regular one to ones should be held with your team in order to document their performance and identify training needs.
Outcomes and Key Performance Indicators
Monitoring customer’s journeys from initial contact through to identifying suitable options is crucial as well as evidencing whether outcomes are positive or negative.
What is a positive outcome?
Meeting the needs and priorities of your customer with due care, skill and diligence.
Communicating information in a fair and non misleading way whilst establishing the right solution for the customer and not your business.
How to avoid a negative outcome?
Building a suite of process guides to support your advisors and monitoring advisor productivity is a fundamental task in running your business. Carrying out regular quality assurance audits using 3 lines of defence to ensure customers are receiving compliant and suitable advice.
A Quality Assurance policy would set out how you propose to monitor risk. The concept of 3 lines of defence emerged following the last financial meltdown in 2008. Three lines of defence would perhaps be call listening by team leaders/managers, internal compliance and external compliance. There are excellent facilities abroad (India) to listen and score advice calls.
Being a competent and compliant advisor is a really tough gig. Typically advice calls will have certain essential elements “mandatory” which if failed will totally fail the call. There are also likely to be consumer detriment risk rating – high, medium or low. For example – going through data protection checks is mandatory and high risk.
Regular management meetings are essential to report on performance. It is a distinct advantage to have a senior member driving this process and ensuring that managers provide their MI prior to the meeting.
Meeting Discussion Points
- Compliance Timeline
- Review of where leads come from and compliance of lead providers
- Incentives review which are linked to Quality Assurance
- Quality Assurance reviews and outcomes
- Feedback on complaints
- Updates on training delivered
- Statistics on performance and Key Performance Indicators on customers’ outcomes
Why chose an advice agency with FCA regulation?
There are plenty of call centres both in England and abroad targeting individuals with misleading headlines such as those pictured.
These lead generators are targeting people with debt as low as £5,000 and persuading them that an IVA is an easy way to write off debt. There is a real concern that people who merely need short term help are being “shoe horned” into IVA’s which will tie them in for at least 5 years where as it could have been more appropriate to consider an informal solution or a Debt Relief Order.
The debt solutions market will continue to grow but at present it is growing in the wrong direction. Individuals are being persuaded to consider formal solutions, Individual Voluntary Arrangements “IVA’s” which always require very careful consideration.
The industry now needs a new breed of debt solution providers that are FCA authorised, who demonstrate a culture of caring and are willing to help individuals who are struggling with problem debt. In addition, who help client’s to engage and improve their financial awareness.
There are significant opportunities for debt solution providers like The Debt Advisor who demonstrate the culture of “Doing the Right Thing” for debtors and creditors.
*IVA’s are formal solutions which allow the individuals to freeze interest and charges and make affordable monthly payments and write of debt at the end which remains outstanding. Homeowners who qualify may need to refinance their property during the arrangement.
Struggling with problem debt
If you find you need some help with problem debt, get in touch. There a range of solutions depending on whether you are salaried or self employed or you are a director or shareholder of a limited company. Should you enter into a debt solution with us, fees will apply. If you would like our team to call you, please use our contact form.
All debt solutions need to be carefully considered. IVA’s are formal solutions and failure to keep to the terms can result in your IVA failing and you could end up bankrupt.
There is also free debt help and advice available through a variety of debt charities. For more information, we recommend you visit www.moneyadviceservice.org.uk.
The Debt Advisor is Authorised and regulated by The Financial Conduct Authority (reg no: 606669).