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Dealing with debt? EuroDebt holds the key for Brokers’ financial futures

In today’s financially unstable climate, many people are turning to debt management as an alternative remedy for dealing with their financial woes. Could it be time for brokers to jump on the debt management bandwagon and save their clients from the sinking loan ship too? Brian Colegate, advisor for EuroDebt believes this is the way forward for dealing with debt.

Cast your mind back to a couple of years ago, when remortgaging against an unsecured loan was the norm and brokers were at their peak in the lending market. The cyclical nature of our economy has led to a new era for the financial world, the reign of the debt management company.

According to Brian, who has been working as an advisor for EuroDebt for six years, debt management is all about “looking at someone’s financial circumstances and determining what they can afford to pay back to their creditors, getting their situation under control. The other part is getting rid of their debt altogether.” EuroDebt advisors work with their clients to review their debt and personal circumstances in a thorough process and establish their expenditure to confirm legitimate cases.

So why should this benefit you as a broker? Brian claims that being the number one company in the UK for meeting with clients on a personal level, puts EuroDebt at an advantage to all other debt management companies. “It is a more personal service and clients substantiate that,” he says. “People welcome the opportunity to sit with an advisor, under no obligation, to see if we can help them.”
On top of this, the potential to earn competitive commission rates for referring clients to EuroDebt, as well as keeping clients on board with you as their broker all add to the long-term beneficial aspects of a debt management plan.

As introducing loans becomes even tougher and consumers tighten their belts to the limit we are likely to see more and more people not able to pay back their debts and potentially getting themselves into negative equity with no other liquid assets to cover the monthly shortfall between income and expenditure. Brian believes that there is a lot to gain as a broker getting involved in the EuroDebt Introducer Scheme. Though EuroDebt have been working with brokers for over 7 years, the scheme was formally launched in November 2007 and in that time has grown considerably with over 650 brokers now registered.

Due to the economic cycle, Brian agrees that the mortgage market will eventually recover and this will create opportunities for full & final settlements where the broker has the opportunity to arrange the finance to make this possible. The idea of earning commission, keeping clients and securing future revenue opportunities is surely all too alluring to brokers suffering from repercussions of the credit crunch, as many are already seeing this as their fiscal future to substitute their loss of earnings in recent months.

If you want to find out more about how EuroDebt can help you generate more income as a broker, or are interested in finding out more, click on the Find A Debt advisor section of the website or visit www.eurodebtintroducers.com.

Does Debt Money Really Count?

In May this year, onlyfinance.com published their report on the state of the personal finance industry in the UK; their surveys revealed only 14% of Britons are willing to admit their level of personal debt. Although this figure is startling, perhaps what would have been more relevant in the current financial climate would have been to discover the percentage of people in control of their personal debt. In the grips of the current credit crunch, the numbers of approved secured loans and investments have plummeted, with FirstPlus announcing this week that it was ceasing trading to new borrowers, as these loans are simply no longer producing the revenue to continue.

However, from the ashes of the secured loans sector, Debt Management Companies (DMC) have risen to take prime place in a financial market whose focus has shifted from expansion to reduction, with brokers increasingly extending their services to incorporate Debt Management Plans. One such DMC with introductory packages for brokers is one of the UK’s leading DMCs, EuroDebt. Speaking to one of their franchisees who formally occupied the Square Mile, I asked him what motivated him to move from procurements to debt management. Aside from the competitive franchisee fee and the infrastructure EuroDebt offers, my source claimed that it was simply the desire to put his knowledge to use helping people. Indeed, my EuroDebt source estimates that 15-20% of his business has been generated through referrals from existing clients; indicating the amount of people who require such services that will never appear in official surveys. It would appear from these figures that we are socially designed to equate shame with punishment, but as my source states the attitude that, “if you’ve got yourself into financial mess, you should get yourself out” is no longer applicable. It was this desire to help people that led him to look for business opportunities that satisfied both his human and entrepreneurial appetites. He resoundingly stated that he had found with EuroDebt both of these elements, through the daily face-to-face contact with his clients, and the financial rewards this returns.

The financial prospects of working for a DMC have attracted much criticism however from a variety of sources, not least from the public sector, who have branded Dam’s unscrupulous for ‘targeting’ custom from those who are most vulnerable; critics claim that charging to clear debt is further victimising those who are already desperate and that such services should be free. Despite a number of free advice services available, which my EuroDebt source acknowledged as positive in making Debt Management advice more visible, he explains the ultimate flaws in the free sector, whose repercussions are only felt by the people seeking advice. He states that, in his 7 years experience as a Debt Management Advisor, many of his clients used free advice services before using EuroDebt. However, they collectively found that lack of continuity of advice, different advisors at each visit and a lack of specialised knowledge led to no improvement in their financial situations. In seeking recovery from dire financial straits there are inevitable costs incurred by the customer if their finances are taken out of their control, including but not exclusive to the fees for solicitors, liquidators and official receivers. The claims that charges are only incurred by people who use DMC's is simply false, and adds to the climate of fear and mistrust facing those who need guidance and honesty the most. Indeed, the stark difference is that the public sector unabashedly criticises the private sector, accusing them of taking advantage of people at their most financially vulnerable. However, considering their stance on protecting the public from sales tactics, it is noteworthy that in a list of ‘Golden Rules’ for debt management published by the BBC in 2005, the last rule was a warning not to trust DMC's. This is ironic considering DMC’s operate under the Credit Act 1974, a law operating for thirty years prior to this article, but further, that where they are meant to be giving advice to vulnerable people susceptible to negative bias.

Although my discussion on the critiques of DMC’s with my EuroDebt source was enlightening, what I really wanted to know was the bottom line as to why brokers would incorporate EuroDebt services into their business practices. The credit crunch won’t last forever, so will Debt Management Plans be as relevant in a few years time? In my sources typically transparent and honest manner he simply said, “Having more golf clubs in your bag improves your game.” I’m not Tiger Woods, and thus I know that if I was teeing off at St. Andrews I’d be reassured that I’d had guidance about when to use my nine iron by a golfer, not a golfer who was also a footballer, a dancer, a fire eater – you get my point. As the financial markets change new business opportunities present themselves, and if business’ can grow and personal finances improve, what really is there left to debate?

Tori Roberts