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29 Mar, 2018 | Nick Pearson
On January 25, at the offices of the Money Advice Service (MAS), Peter Wyman launched his independent review of UK debt advice funding.
A report commissioned by the MAS Debt Advice Steering Group, incidentally a group currently with no representation from the commercial/fee-charging debt advice sector, but with all the major free-to-client providers round the table.
Wyman was not wrong when he said that many of those present at the launch would not like all his proposals. Indeed, this proved to be something of an understatement. The focus of this article is not to give a full picture of his excellent report, but to look at it specifically from the perspective of the fee-charging debt advice sector.
I was invited to the launch as a representative of One Advice Group/Harrington Brooks – One Advice Group and Think Money were the only fee-charging debt advice firms who submitted a response to the Wyman’s call for evidence. It was a grand day out if, like me, you thrive on schadenfreude!
For those readers not au fait with background, since the first fee-charging firm emerged in 1993 there has been an ongoing campaign by free services to get commercial firms removed from the market, either via direct campaigns or via stealth (e.g. suggesting that only free providers should be able to provide the proposed Statutory Debt Management Plan).To many in the free-to-client sector, charging for debt advice is immoral and no one, regardless of income, should ever pay for debt advice.
Whilst there have been a few folks in the free sector who have suggested there is a role for commercial firms as part of a mixed economy of debt advice provision, they have been little more than voices lost in the wilderness. In fact, the only group of people who have advocated that there is a legitimate role for fee-charging firms has been eh… well fee-charging firms.
Then along comes Wyman and his independent review.
So, what did he propose that has led to stony public silence from Citizens Advice and little more than anodyne “welcomes” from StepChange and the Money Advice Trust?
Firstly he had the temerity to suggest that fee-charging firms should be able to choose if they want to operate a fair share system where all creditors pay their fees via a fair share contribution. This funding model is currently limited to free-to-client providers, mainly StepChange and PayPlan. Indeed, Wyman states that the fair share contribution “should be the full amount requested by the debt advice organisation (not-for-profit or commercial) requesting it.”
In paragraph 92 of his report he states: “I am very comfortable with a mixed economy in which some consumers choose to pay for debt advice, and indeed see no reason why those whose income comfortably exceeds their outgoings but who have problem debt should not pay for debt advice in the same way as they pay for other professional advice. However, I do not want any consumer to pay because they are unaware that free debt advice is available from the charity sector.”
This sort of talk is heresy to the free sector who until Wyman stood up to introduce his recommendations, had never heard anyone of any importance make such assertions.
Wyman didn’t stop there however. He went on to suggest that fee-charging firms should be listed on the MAS debt advice locator tool and be able to tender for MAS debt advice delivery contracts.
He also suggested that all providers, whether fee-charging or free, should have an FCA approved quality assurance process and that all those giving debt advice should have a recognised and accredited debt advice qualification.
All this as well as a proposed modest shift in channel service delivery from face-to-face debt advice to telephone services and from telephone services to webchat. The increase in MAS funding Wyman proposes will be scant consolation for many in free sector headquarters.
Those free sector headquarters will all have one aim – to see many or even all (except the increase in MAS funding) kicked in to the long grass. Wyman must be discredited, his report ditched, and fast.
I have no idea how all this will play out but all I can say is I have rarely enjoyed myself at work as much as I did on January 25 2018.
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