It seems that the sudden rise in the debt solution market has its similarities to the development of the sub-prime lending industry over a decade ago. What is even more interesting is the bizarre correlation of the collapse in the UK sub-prime mortgage market and the growth of debt management companies.
The UK financial services market is having to adjust to serious change. What has to be asked though is whether or not intermediaries in the UK are able to adjust themselves and recognise solutions for clients in debt, such as individual voluntary arrangements (IVAs) or debt management programs, as part of their overall advice service. Those that do will then have to decide upon the many of the growing debt management companies that have set up and want their business.
The concept of recognised and acceptable debt solutions as an alternative to bankruptcy has been challenged in a comparative way to that of the earliest forms of sub-prime lending. Unfortunately th e debt solutions market is still unregulated and does not come under the regulatory responsibility of the Financial Services Authority. However regardless of whether the debt solution industry is regulated or not, intermediaries that are registered under the FSA still have an obligation to treat their customers fairly. Therefore when discussing financial arrangements with a client who is dealing with large amounts of debt surely an experienced intermediary or financial adviser should be offering a range of debt management solutions as part of the FSA's treating customers fairly guidelines.
At present there are only a handful of options available and intermediaries are not been given enough information or choice to educated themselves on this emerging market, let alone advise their clients correctly.
Working with an established debt solution partner who offers a comprehensive range of debt management solutions should be a priority for any mortgage intermediary or financial adviser in this current market climate.
This Secured Loans article was researched and written by Gary Paul Taylor
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