UKAR ARENA | A NEWSLETTER FOR DEBT ADVISORS | AUTUMN 2015 | ISSUE 10 | UKAR-ARENA.CO.UK
04.
“WE NEED TO FIND
WAYS OF EQUIPPING
OUR CLIENTS TO MAKE
BETTER DECISIONS.”
“Coping with and responding to FCA regulation has
to be the biggest challenge for anyone working
in the industry at the moment and it will be
interesting to see the different reactions from free
and fee-charging advice providers moving forward.
For us as an organisation, working to promote
financial capability, the new regime presents a new
set of problems, especially when it comes to not
crossing the line into regulated debt advice.
LIZ DUNSCOMBE
Head of Adult and
Industry Programmes
The Money Charity
So, for example, when someone attending one of
our workshops recently asked a question about
managing their budget, we had to be very careful
how we answered. How the FCA imposes regulation,
where the line is drawn in this area, is something
that could prove tricky for us to work with in future.”
TEN AT TEN.
“RESPONDING TO FCA REGULATION
HAS TO BE THE BIGGEST CHALLENGE FOR
ANYONE WORKING IN THE INDUSTRY.”
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“Helping clients make truly informed decisions is one of
the biggest challenges the industry faces. Whilst much
work, rightly, has been done to encourage people to
seek debt advice it is clear to us that once they do,
consumers are still at risk of making poor choices.
Advising on the suitability of solutions which are less
comfortable but provide better long-term outcomes
requires a skilful and careful conversation but if we
can get these right, the positive impact on consumers
will be enormous.
When we measure long term consumer outcomes
across the range of available debt solutions, we
find more people choosing Debt Management Plans
(DMPs) than would seem sensible from a financial
perspective and fewer choosing bankruptcy.
In terms of the challenge faced by us as an organisation,
we need to practice what we preach and find ways of
equipping our clients to make better decisions.
As the FCA observed in their thematic review,
consumers often start from a position of bias. They
may have strong personal views about options like
bankruptcy but their understanding of the implications,
or features, of these solutions may not be accurate.
We have undertaken our own research in this area
showing the differences in non-financial impacts
between solutions are less pronounced than people
might imagine. We didn’t find the kind of hidden benefits
which would make current consumer preferences
understandable from an outcome/impact perspective.
Instead, we believe consumers are drawn to the
solution which feels most comfortable and least
disruptive in the short term – even where long term
costs are disproportionately high.
We are sharing our research with customers and
this is changing the conversations we have with
them. Our challenge is to provide the right level
of information in a timely and sensitive manner
enabling people to fully understand the choices
available to them.”
JOHN FAIRHURST
Managing Director
PayPlan
05.
The views expressed in this magazine are those of the contributors and do not reflect those of UKAR.
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