Every adviser, regardless of time served, has a ‘transaction type’ that is their least favourite. Might be lending into retirement. Residential interest only perhaps. Contractors with small contracts and very little prior evidence comes to mind… For me, it used to be Debt Consolidation. For multiple, (very) unrelated reasons…
Firstly, the thing with any high-risk lending transactions and advice is not only is there often a boatload more to do upfront before submitting an application, to the uninitiated adviser, it can seem like a minefield. The key dominating thought for most advisers is ‘how do I know I’m doing the right thing?’ I.e. Is this the right advice?
I was always taught that all clients you deal with should be treated as clients for life. With any later life lending, or indeed interest-only transactions, the existential dread of making sure the client is fully informed of how they intend to pay their mortgage often 20+ years into the future can play on the mind. ‘With Debt-con’ not only do you have the current payments, interest rates, 0% balances, and overall added interest to the mortgage over the term to think about but also ‘What if I see the client again in the future and they’re back in debt?’
I was pondering this very thought in the dimly lit basement of a Grade 1 listed estate agency office I worked in once. It was a building very much on its last legs (the windows froze on the inside over winter and we couldn’t go to the top floor as the roof had partially collapsed) situated on a historic Market Square. I had clients due back for a second appointment any minute so was grabbing some very last-minute lunch. The only ‘safe place’ to eat in the entire building was the dingy basement which had no windows, a load of filing cabinets and a small square cupboard door (think 80cm x 80cm small) and was lit by a single, uncovered bulb (which may as well have been a candle)
Now I’d been working in this office for a year and this had always been my lunch routine which I had always completed successfully without incident. Only on this particular day, someone knocked from the other side of the cupboard door…
I quickly realised that probably wasn’t my 2pm client, so I quite rationally put down my subway sandwich and absolutely legged it up the stairs to the main office. Usually the ever-cool character, one of the guys (let’s call him Crabbers) noticed that I wasn’t myself. All I managed to communicate was ‘someone wants to come in downstairs…’)
After giving the details of what happened, Crabbers grabs a torch and heads down to the basement with me close behind. Crabbers was a larger-than-life character (literally and figuratively - a truly fantastic guy) and as a young lad at the time, I already felt confident that this would have a safe conclusion. Crabbers gets to the basement, bends over and opens the cupboard door. Now due to the cramped conditions and the tragic lighting, I couldn’t see what he saw. After about 10 seconds of unflinching silence, Crabbers shuts the door, looks at me and says ‘It’s a pigeon… fetch Meg’
Now Meg was our administrator. It turns out she owned a Parrot when she was a kid and Crabbers felt like this gave her the expertise to deal with this unique affair. I absolutely failed to give her the full information of the situation, but she came down to the basement out of sheer curiosity at this point. While I was getting her, Crabbers had moved some of the filing cabinets to create a sort of ‘pen’ and we reopened the tiny cupboard and shone the torch in. Sure enough, there was a very dirty and dishevelled, unblinking, unit of a pigeon who looked like it had ‘seen some things.’ (It turns out that the entire of the market square housed a number of ‘secret tunnels’ underneath it from the old church that dated back 100’s of years. I genuinely thought it was just a cupboard where the gas meter was…)
Suddenly, it dived forward into the basement where pandemonium ensued. Crabbers showed great survival instincts by yelling ‘RABIES!’ and pushing past Meg and I to make a swift exit. After watching him disappear upstairs, I looked to see Meg frantically trying to catch this pigeon (I know this sounds like a cartoon…)
Anyway, she catches the surprisingly agile bird, runs up stairs through the office (which was full of customers at this point with me shouting ‘out of the way, there’s a dirty pigeon!’ or something to that effect) and then out to the front of the office. It was then she forced the pigeon into my hands so we were both eye to eye. It was clear neither myself or the pigeon were happy with this arrangement so I decided, like with doves at a wedding, to launch the bird into the air as I figured that’s what would make it happy.
Sure enough, it spread its wings and started to soar gracefully over the market square, hopefully to tell its incredible tale to its pigeon friends. Meg clearly felt very accomplished (and perhaps thinking of her old parrot?) all I could think about was washing my hands after Crabbers ‘Rabies’ comment so I turned to go back to the office. It was then I heard Meg say ‘pull up… PULL UP!’
I turned just in time to see the pigeon fly straight into one of the buildings on the opposite side of the square and then dropped to the floor. I think someone screamed (it may have been me at this point) and that was that. It was at that moment my clients turned up, completely unaware of the ordeal that had preceded the last 5 minutes. I shook both of their hands before remembering the state of mine so we started the appointment with a group hand wash with some fairy liquid while I recounted the tale.
How does this relate to Debt consolidation I hear you ask? Well, the takeaways for me are:
· Face your fear. The client needs advice and it’s your job to give it.
· Use the experience of other advisers to understand the process of preparing for a Debt consolidation case.
· Follow the process and make it clear to the clients the dangers and pitfalls of interest costs and not having the same situation happen again.
· Ultimately, as long as you have evidence that you’ve done everything right, once the transaction is done, the client has a responsibility to uphold their end of the bargain by not getting in debt (obviously there are very subjective reasons as to why debts happen!) It’s just always important that clients understand the impact of interest costs over the long term
Hopefully it has a better ending than the pigeon did…
Thanks for reading.
And see what Dashly does daily to help mortgage advisers in this regard: https://dashly.com/partners/mortgage-advisers
Dashly Operations Manager - Intermediaries
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