Kevin Still of the Association of Professional Debt Solutions Intermediaries

In our special association In Profile, we sit down with Kevin Still to found out more about APDSI and his role in the organisation...

1) Could you tell us a bit about APDSI and what it was set up to achieve?

Financial intermediaries, for example IFAs and mortgage brokers,  represent a very substantial channel into the debt advice sector and are often the first contact point for indebted consumers and micro-businesses.

The founders of ADPSI believe that a substantial community of small businesses in the financial services sector need to be properly represented in respect of the provision of debt advice and debt solutions without duplicating the roles played by trade associations set-up for the purposes of representing core broker activities.

The regulatory framework and interlocking compliance regime is complex for the majority of these SMEs, especially if they don’t have a compliance function. The writing was on the wall when we established the association in 2010 ,and 2012 is set to be a major year of change for most intermediaries from a regulatory perspective coupled with continued tough trading conditions.

2) How long has APDSI been running?

We established APDSI in October 2010 and launched the association at Mortgage Business Expo (MBE) in London in November 2010.

3) What is your role within the association?

I am a director of APDSI and represent Pentagon (UK) Limited, one of the founder members. Like my fellow directors, I provide a range of support services and represent APDSI at a number of Business Academy events and forums around the country, notably in partnership with Affiliate Member TrigoldCrystal.

4) How did you get involved with APDSI?

Having been present at broker events through the recession it was clear that there needed to be a major focus on the education of financial intermediaries with regard to the impending regulatory changes at a number of levels, notably by the OFT with their extended powers from April 2008. It was apparent that a number of changes could impact a wide audience of licensed businesses and that there was a significant potential for non-compliance through a lack of understanding or lack of communication to those affected. For example, the OFT had communicated to a limited extent to the main trade association in 2009/2010 their position on businesses referring cases to debt solution providers, but this was not widely circulated. Setting up APDSI represented an opportunity to convey messages to a wider audience where their business models could be affected.     

5) How do you see the organisation changing or growing over the next year?

We expect to see an increase in full members as various OFT consultation papers are formally published and become the minimum standards of conduct, for example, the Debt Management Guidance and the Misleading & Otherwise Undesirable Names Guidance. We have also seen guidance published on Credit Brokerage. We are already supporting a number of affiliate programmes with Networks and supporting the Web Services offered by providers like TrigoldCrystal and MiLoan. It is not just the licensing regime that is challenging, there have been a number of developments in respect of acceptable marketing and advertising practices, as set down in e-Commerce directives and the BCAP rules. One of the more useful sections of the Debt Management Guidance is the one that sets out the interlocking regulations policed by the respective regulators (e.g. OFT, FSA, MoJ, ICO).  

6) What is APDSI’s vision for the debt industry?

It is important to remember that our members don’t really regard themselves as in the ‘debt industry’. In the main they don’t target people or businesses in financial hardship, it is just a consequence of changes in circumstances in their client bank or the locality that they serve. Our vision is to work with the major debt solution trade associations like DEMSA, DRF and insolvency practitioner associations. We also want to build relationship with the free-to-consumer sector, as our members make an informed choice with regard to where they sign-post clients in financial difficulty. 

The market is difficult to predict with the Money Advice Service (MAS) taking over part of its future role in debt advice from April 2012 and the mechanics of the levy on FSA authorised businesses still to be concluded. The dismantling of the current regulators will be of concern to many, where a ‘better the devil you know’ mindset seem widespread. I would expect further consolidation in the commercial debt solution sector, but, despite the extension of the brief of MAS, there will always be a substantial need for the commercial sector in the provision of debt advice. The recent BIS select committee debate on debt management confirmed that around two thirds of all debt solutions are provided from the commercial sector. Our members typically deal with homeowners with higher levels of unsecured debts. There also seem to be more families affected by loss of disposable income where re-financing is no longer an option.

7) Compliance is a huge issue at the moment – what kind of advice/help does the association give with regard to helping its members remain compliant?

We expect to continue to provide our regulatory updates and extend our reach through forums like LinkedIn. We will maintain a visible presence at industry events and publish a regular newsletter. We have started to offer a free compliance health check at the 2012 TrigoldCrystal Business Academy events, which have been well received. The aim of the health check is to undertake a review of a broker’s CCL and website. We produce a report identifying areas at risk. Brokers have access to the members’ area of the APDSI site for a period of one month to access the most recent regulatory updates. 

8) How do you think the debt industry has changed in the aftermath of the economic crisis?

We are seeing a lot of the opportunistic debt solution intermediaries and providers drop out of the industry, which can only be good for the public and brokers in making an informed choice. Standards are improving and consumers are increasingly ‘shopping around’ before making a decision on the right solution for them, which is one of the government’s objectives so that debt solutions aren’t regarded as a ‘distressed sale’. We aim to improve the client journey from the point that they recognise that they are in serious financial difficulty to the selection of a reputable debt solution provider.

9) How does APDSI help to provide the intermediary perspective to regulatory bodies including the OFT, the FSA and the MoJ?

We have presented at forums like the Money Advice Liaison Group (MALG), at which the regulators are represented, and we have had one-to-one meetings with several of the regulators. We have responded to the OFT consultation papers from our members' perspective and. as has been necessary in several instances, will continue to represent them at an individual level where appropriate.    

10) You are currently supporting TrigoldCrystal’s Business Academy roadshows, could you tell us a bit more about the education and support this partnership is offering financial intermediaries?

I attended an event in Southampton recently and this was well attended. It was apparent from the show of hands by attendees that the majority were unaware of some of the impending clarification by the OFT regarding broker licensing and conduct. Some were members of Networks and we will try and work with the compliance functions of these Networks to improve awareness. As mentioned before, the free compliance healthcheck was well received. We are looking to focus on more specific sessions in and around web services and the compliance requirements around advertising, marketing and including links to FOS compliant complaint policies, where the OFT ‘redress’ requirements need to be more communicated.