The debt solution specialist believes that whilst intermediaries must embrace the benefits of debt advice to help clients with financial concerns, they should not form allegiances with firms charging large up-front fees which could result in additional problems for clients further down the line. Fee structure transparency should be the key element when referring clients to such firms.
As consumer debt problems increase, the intermediary market could be targeted by firms with the potential to push vulnerable people into even worse long term problems. Guardian believes it is vital for intermediaries to forge affiliations with trusted, experienced and knowledgeable debt solution companies in order to maintain client loyalty and longevity.
David McCann, managing director at Guardian Debt Management, said: “The charging of large upfront fees is completely unethical. How firms can justify an initial charge of over £1,000 when this could be used to try and help satisfy a financial commitment to an outstanding debt is beyond me. A large referral fee can appear tempting in the current economic climate but intermediaries need to take the long term view as it is imperative that their client will be properly looked. Ultimately if this is not the case then it will reflect badly on the introducer and may result in a loss of further business and potential referrals.
“Intermediaries should be doing thorough checks on potential partners across the whole of the industry and this is especially applicable for those looking to debt solutions. The sector continues to be tarnished by a rogue element but it is important to stress that there are good firms out there that can offer genuine solutions to clients whilst opening up new revenue streams for intermediaries.”
