Bev Budsworth of The Debt Advisor

We spoke to Bev Budsworth, Managing Director of The Debt Advisor, about consolidation, committees and why E + R = 0....

1) Firstly, what exactly does The Debt Advisor do?

We specialise in helping individuals and businesses facing solvency problems – it’s about helping them formulate a strategy to get back on their feet. We are headed up by an insolvency practitioner and employ 24 people. Our specialisms are personal insolvency, informal solutions – we offer the full array of insolvency procedures. If someone can avoid insolvency that’s what we help them do.

2) When did you set up the company?

We set up in 1999. I set up as sole proprietor and built up to a team of 14. We sold to an AIM-listed Plc in 2006 and then bought back in 2007. We have continued to steadily grow and now have a team of 24.

3) What kind of debt management advice do you give?

We offer the full range for individuals, traders and partnerships. I am a licensed IP and am regulated by the Insolvency Practitioners Associates.

4) You have won a string of awards since you started business, what do you think makes your approach so successful?

We’ve always set about to be altruistic, and in 2003/4 I started work with a psychotherapist which was awe-inspiring. It was really interesting to understand the process the human body goes through when stressed. I brought the psychotherapist in to give soft skills training which incorporated NLP skills to my team. Of course you can deliver debt solutions, but we need the client to be with us on our journey. It’s about helping people to empower themselves. My favourite strategy E + R = O with E being the event - what’s happened to get you to your current position, R is your response and O is your outcome.

It’s about getting clients to visualise where they want to get to and then empowering them to develop their Response to get to their Outcome. Most of our clients want a reprieve from stress and to live within their means. People buy into the concept much more when they feel empowered, and our advisers use this technique in a subtle way. Our attrition rate on IVAs is only 7 per cent per annum, whereas the industry norm is around 25 per cent, and I think this is because we manage our clients’ expectations.

It’s a tough process and requires commitment from the clients, but we try to be realistic and make sure our clients understand the process. The clients have to understand that they need to actively change their lives – they can’t just live on extended credit. It can be hard to adjust though because they have to live within their means for five years whilst on an IVA. However, both IVA and DM can bring tremendous relief from debt stress.

I took part in the SIVA (Simplified IVA) Working Party 2003/4 which looked into simplifying the IVA. This effectively gave a government stamp of approval to the IVA process which looked terminal when the bankruptcy discharge period reduced from 3 years to 1. IVA’s increased from around 8,000 in 2003 to 19,817 in 2005 to 50,716 in 2010.Debt management plans are currently going through the same metamorphosis as IVAs. The debt management industry is enabling a huge chunk of the population to repay their debt in an affordable way. Many people need an intervenor to act on their behalf because they are simply not in a position to liaise with their creditors to accept reduced payments, and freeze, where appropriate, interest and charges (some creditors are better than others at doing this).   

5) How does the majority of your business reach you? Do you offer incentives to brokers for referrals?

We set up an affiliate campaign approximately three years ago to increase awareness amongst intermediaries. We have built up a great network over the years – a great deal of our work comes from referrals.

6) Apart from running The Debt Advisor, what other involvement do you have within the industry?

I’m on the board of the Debt Resolution Forum and I’m also on the Personal Insolvency Committee – which is a committee set up by the IPA to assist practitioners who undertake personal insolvency. We contribute to consultations and think-tanks to influence the government or the OFT. We consult on new guidelines and raise awareness of issues that need to be tackled in the industry.  

7) What did you do before you began The Debt Advisor? 

I spent 17 years at Deloitte. I joined as a young lady, at the age of 19, and was really fortunate to be offered a role in the insolvency team. I got amazing training and qualified as an insolvency practitioner and left them as a very experienced insolvency senior manager.  

8) What less well-known options are available to those seeking debt management that brokers may want to refer their clients to you for?

What we try to encourage brokers to do is to refer clients to us with any kind of debt problem. There is invariably a solution, even if it just tightening your belt. There is no debt problem that cannot be solved. Bankruptcy is often an immense relief but it is important that people get the best advice that suits them. A full and final settlement can often be a really sensible alternative to debt, whether through an IVA or an informal full and final settlement. Creditors can get their money quickly and debtors can move on. It is all about treating both the client and the creditor fairly. 

9) What do you predict happening in the debt management sector of the next couple of years? 

I see quite a lot of consolidation happening over the next few years. The industry is somewhat saturated – there are a LOT of service providers. I’ve come across practices throwing caution to the wind in an attempt to get leads, people are paying lunatic prices. Where we end up in terms of compliance – well in the short-term, of course, there are the guidelines from the OFT. The OFT jumped into action a couple of years ago and really went through the industry and cleaned it up. In the long-term, I think regulators will get tougher with regard to compliance, but from my perspective that’s definitely not something I think service providers should fear.

10) If you weren’t working at The Debt Advisor what do you think you would be doing instead? 

Playing golf! I started playing two years ago and I love it. I think it is very important when running an organisation to get the balance right. I’m trying to recruit a girlie golf society – a glass of wine with the girls tastes fantastic after a hard day on the golf course!