Trust Deed Survey Question About Qualifications

9th November 2010

The 2010 Trust-Deed.co.uk survey asked our visitors and site members a question about whether professional qualifications should be mandatory for those who advise on Scottish trust deeds:

“Do you believe that any individual that provides debt advice or trust deed advice should hold a formal professional qualification?”

94% of those who expressed a definite opinion said that a professional qualification should be held by any person providing trust deed advice.

In this article we will provide detail about the types of training that are typical in various sectors of the free and commercial debt advice industry. Included will be some suggestions to help readers avoid the potential problems that can be caused by poor debt advice from untrained individuals.

Insolvency Practitioner Employees

An insolvency practitioner takes on a protected trust deed as a personal appointment. They have personal responsibility for any case that they take and are accountable to their professional bodies for handling cases in an appropriate manner (which is compliant with the law and the guidance of their regulators).

Insolvency practitioners therefore require teams to handle the work involved in dealing with cases. The work will include initial advice, managing and reviewing existing cases, cashiering work to receipt and distribute payments, and the work required to close a protected trust deed case.

The insolvency practitioner remains personally responsible for the work of their team and is subject to compliance visits and checks on a continuing basis. Therefore a strong incentive to provide proper training and qualifications exists.

Some larger trust deed companies will also handle other types of debt solutions as well, for example debt management plans. In this instance employees may receive either in-house or external training programs to ensure that they are capable of providing advice on the full range of debt solutions available.

Where employees are specifically dealing with protected trust deed cases there is likely to be a combination of in-house training, external insolvency courses and seminars, and possibly insolvency examinations as well.

Therefore dealing directly with an insolvency practitioner and his or her staff directly is likely to increase the chances that you are speaking a properly trained and monitored employee compared to some of the other alternatives.

The feedback on the service provided by various trust deed companies does vary significantly in the Trust-Deed.co.uk forum so care should still be taken to pick a good company when taking advice.

Debt Management Company Employees

The Office of Fair Trading recently expressed concerns about the quality of advisers at many debt management companies. Such companies typically advise on all debt solutions (including protected trust deeds) and refer cases to specialist companies where a solution cannot be provided in-house.

The OFT concerns were based partly on the actual competence of the employees, but also were based on some situations where it was felt that such advisers were acting as salespeople rather than advisers.

The reality is that there are some good debt management companies (primarily members of trade associations DEMSA and the DRF) where training is considered to be important. Over 30 of these companies have enrolled staff on the Certificate in Debt Resolution which is an Edexcel approved Level 3 qualification. The CertDR equips advisers with knowledge about the overall lending and debt environment, specific knowledge about each of the main debt solutions, and the processes required to analyse an individual’s circumstances to provide advice and recommendations on debt solutions.

However there are many hundreds of debt management companies where little or no investment in training has been made.

If you are considering taking a protected trust deed we would urge caution when taking advice from a debt management company. Asking the adviser with whom you are speaking to outline what qualifications they hold, and what training they have received, will help to protect you from poor trust deed advice.

Trust Deed Website Employees

There are a number of websites that specifically advise on trust deeds. Such websites can provide a useful and focussed source of information for people considering this option. Websites such as these advise clients and help to produce work that will be helpful in the establishment of a protected trust deed by an actual trust deed company (to whom the client may be referred later).

Unlike debt management companies appropriate trade associations do not currently exist for such lead-generating websites and therefore there is less training support available. We are not aware of many such websites that have enrolled their staff in a professional qualification such as the Certificate in Debt Resolution.

A quick look at some trust deed websites also reveals a heavily sales-led approach rather than being driven by advice. Many appear also to contain statements and promises that directly contravene the requirements that have been issued to the debt advice industry by the OFT. If you see statements such as “write off 90% of your debt”, “be debt free in 36 months” or displaying the OFT logo despite not being a member of a trade association that is OFT code-approved, you might assume a sales rather than advice-led approach is in place.

In common with employees of debt management companies, we therefore urge that caution be exercised when taking advice from lead-generating trust deed websites. If you feel that you are being sold-to rather than advised we’d suggest that you look for help elsewhere. Ask any employee that you speak to whether they hold a professional qualification or can point to any other formal training that equips them to deliver advice properly.

Money Advisers and the CAB

A “Money Adviser” is someone who is trained to offer debt advice and who may be able to help you set up an affordable payment plan with creditors. Many operate on a free basis working for local councils for example. Others work on a commercial basis.

To be able to use the “Money Adviser” title an individual must first receive significant training. Therefore the advice that they provide can be based on high levels of knowledge and skill.

The Citizens Advice Bureau also employs some specialist debt advisers who have received very significant levels of training. In common with Money Advisers such advisers can also be assumed to be an excellent source of advice on trust deeds and other debt solutions.

The CAB also utilises volunteer advisers that work with support and with a significant knowledge-resource database. Such advisers have not received significant training in debt solutions and therefore rely on the support of specialist colleagues and the knowledge resources made available to them.

Forthcoming Trust Deed News Article

The next article based upon the trust deed survey results will look into at how those who are in trust deeds, or those who have considered taking protected trust deeds, perceive that they have been treated by their creditors.

For further Trust Deed news and information, please visit our forum where we have a wealth of advice from experienced industry experts.

Trust Deed Latest News

Wylie & Bisset Grant Thornton

(c) Channel Active Limited. Company Number: 06412452. Data Protection Registration: Z1332750.
Telephone calls may be monitored or recorded. Authorised and regulated by the Financial Conduct Authority.
Trust-Deed.co.uk, Clyde Offices, 2nd Floor, 48 West George Street, Glasgow, G2 1BP. Tel: 0141 2490416.