In August, we spent 60 seconds with Carmel Franklin, Director, Care Financial Counselling Service; Chair, Financial Counselling Australia; Member of the FOS Consumer Liaison Group
How has financial counselling changed in recent years?
When I started in the sector 20 years ago, there was much more of a sense of ‘us and them’ with industry. In the past few years, we have developed a collaborative approach with financial institutions which is delivering better outcomes for clients.
The introduction of the National Credit Code has enabled us to work more consistently and efficiently across Australia, and the industry recognises the value in working with us and that we have matured as a sector. We now have opportunities that we never had before for formal engagement with industry, for example through the Australian Bankers’ Association’s industry strategy working group.
How did funding uncertainty affect the sector in the past year?
The past year has been enormously challenging for the sector and because organisations have been unsure whether they will retain funding, some counsellors have already left the industry and in most cases, they weren’t replaced.
However, it’s clear that the Government values the work we do in the sector and, as the peak body, we have been invited to apply for additional funding – in particular to support financial capability and money management workers.
How do financial counsellors help consumers?
The Wyatt Foundation has undertaken a cost/benefit analysis that shows the many benefits of financial counselling for people in financial hardship. We provide people in such situations with information on all of their options, and support them to work through these options. We also advocate on behalf of clients with creditors. The aim is to get sustainable payments in place to help them get back on their feet.
Is demand for financial counsellors increasing?
Yes, we have about 950 financial counsellors across Australia, but as consumers’ financial situations become more complex, it is difficult for us to keep up with demand. Financial institutions increasingly recognise the value of financial counsellors, and are referring a lot more people to us – and we encourage that - so it is frustrating (for us and them) when they are told that our services have a waiting list.
Why are demands from consumers increasing?
Historically, people were in debt but usually had only one credit card. Now, there are so many products available, and more choice can mean more confusion. Also, life circumstances are increasingly complicated for many people, with complex family situations, marital breakdown and mental health issues much more common.
We have to keep pace with all this complexity through training, professional development and supervision to ensure financial counsellors have the very specific skills and knowledge to deal with clients, especially those in vulnerable situations.
FOS plays a fantastic role here – when people cannot come to an arrangement with their financial institution, they can take their matter to FOS. Being on the Consumer Liaison Group has given me an insight into how FOS works, and this understanding has helped me advise consumers on how to achieve the best outcome for them.