Brokers must tread carefully with debt management firms

There’s little for brokers to feel bullish about right now but one of the few bright spots for developing new business – providing debt solutions to clients – is in danger of being hijacked by companies that have neither the expertise nor the required knowledge of the broker sector.

When I set up TCF Debt Solutions it was based on extensive market research into the services that brokers would need.
We felt that to provide the right services we needed to have the necessary expertise inhouse to not only offer debt management planning but also individual voluntary arrangements.

We employ two insolvency practitioners and a team comprising experts in the field of providing appropriate advice for brokers and their clients.

Along with constant case updates through our website and a cast iron no cross-selling guarantee, brokers have all the tools they need to help their clients.

But many of the companies advertising in the trade press claiming to be experts are just acting as brokers. They have no internal facilities or expertise and pass cases through to other companies, although you can be sure they expect to get paid. This increases client costs and is unacceptable.

Other companies only offer debt management plans as a solution. But if cli¬ents are going to get the best advice, solutions should include debt management and IVAs too.

Brokers who have been striving to meet their obligations under the Treating Customers Fairly initiative must be wary of passing clients to companies that are one trick ponies, offering the same answer to every one.

Brokers we are dealing with have told us about the lack of feedback they get when dealing with some debt management companies.

They are used to instant updates on mortgage business and should get the same service here.

The fact that many companies do not attempt to engage with brokers is a sign that they have no intention of providing feedback.

Certainly, brokers need to be sure they deal with companies that have robust no cross-selling agreements in place.

Without them, once they are out of debt clients will be fair game when they should be referred to their original brokers.
Unless the company chosen is open and transparent from the outset, it’s unlikely that brokers will see their clients again.

So they need to be careful that shiny promises are backed up by services that are right for their clients and for themselves.

Andy Moody
Managing director
By email