Credit Management APRIL 2019

SHOW ME
THE MONEY
The money merry-go-round of debt advice is confusing
how future funding should be raised and spent.
AUTHORS – Peter Wallwork MCICM and Henry Aitchison.
FEW, if any of us, working in
the financial services sector,
would deny the need for debt
advice. The argument, if that
is not too strong a word, has
been more around how such
advice should be funded, and by whom.
The debate has not been helped by
a clear lack of transparency and data
regarding the current funding channels
and sources. Little surprise, therefore,
that the Single Financial Guidance Body
(SFGB) and its predecessors also found it
difficult to unravel the ‘money merry-goround’
of debt advice, and why the CSA
is keen to work with them, in finding a
workable solution. And it is important
to note at this point that we are not at
loggerheads over this issue. Far from it.
What all of us can agree on, is that any
future funding contributions should be
fair, equitable and transparent, and that
any future thinking remembers that it is
not only financial services businesses that
‘benefit’ from debt advice and informal
debt repayment plans. There are clearly
firms and organisations that benefit
from debt advice, but who currently
contribute nothing towards it. They may
contribute in other ways, but without
data, the conversation can quickly fall on
deaf ears. Transparency is also an issue;
without transparency on who contributes
currently, the industry ends up blaming
one another and pointing fingers, often in
the wrong direction.
What we hear is that funding needs not
only to be fair, but also clear about where
and to whom it is going. What is also
critical is that any money spent is spent
well in delivering real help to the consumer
and not being lost in inefficiency and
un-necessary overhead. Our members
tell us that a better understanding on
these points is an essential next step in
the funding debate. There may also be
other ways of contributing to help debt
advice agencies more directly, to help
drive efficiencies to enable the funding to
go further.
UNDERSTANDABLE FRUSTRATION
There is, however, a sense of
understandable frustration among many
about the lack of clarity and meaningful
data to support the value that debt advice
ultimately returns. Economic impact
papers from the SFGB suggests a value is
there, but do not perhaps tell the whole
story.
What we do know – and most of that
has to be estimated – is shown in the
infographic. The size of the funding pot
The Recognised Standard / www.cicm.com / April 2019 / PAGE 22