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DMP and FCA Authorisation

Hi everyone,

First post so please bear with me if I ramble.

Basically, the situation is - a few years ago, I was signed off sick and my husband was made redundant just after having our first child. We had nothing and had to basically live on credit.

We ended up moving back in with my mum and really struggled to make ends meet but, over time, we have worked hard to put things right.

We decided around 2014 that the best way forward was for me to do a DMP (most of the debt was in my name) and keep my husbands creditors out of it because we could still make the minimum payments and it gave us a little flexibility. I haven't missed a payment in that time and have tried to make sure I pay as much as I can. We don't go out or take holidays and we've worked to keep our outgoings as low as possible.

Fast forward 3 years and, after my husband losing his job whilst I was on mat leave, we ended up using his credit accounts to get by. I returned to work within weeks of giving birth and my husband is now working for himself (ironically seems more stable than an actual employed position.) Last month, we made the decision to pull everything into the DMP and have significantly increased the payments (clearance down from 12 years to 4!)

We have protection in place to cover both our income and to provide a lump sum to cover the outstanding and provide for our kids should anything happen to us. In addition, we are expecting a lump sum payment that will more than cover our outstanding debt within the next 12 months.

Now, the issue I have is I'm training to be a financial adviser. The decisions I've made regarding debt management, budget planning and prioritising debts are exactly what I would tell a client to do in this situation. I do not see my misfortune as being indicative of an inability to do my job and, in all honesty, I feel that being in this situation gives me more ability to empathise.

However, the FCA's "Fit and Proper" test requires that I be "Financially Sound." This seems to just relate to CCJ's and insolvency but, I want to ask if anyone knows whether a DMP would be prohibitive here? I do not want to lose my career over something that was genuinely out of my control. I can prove I have no missed payments and have made every effort to rectify and deal with the situation.

Any advice/information would be very gratefully received!

G.

Comments

  • sourcrates
    sourcrates Posts: 31,950 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Hi,

    A DMP is not an officially regulated arrangement, its an informal agreement between you and your creditors, as such nothing appears on your credit file in regard to this, only any defaults/late payments etc associated with any debts included within that DMP.

    So it would depend on the terminology of the question, if it said :

    "Have you ever been Bankrupt" ?

    You can answer truthfully No.

    But if it asks :

    "Have you ever been in debt management" ?

    You would have to answer yes.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • AlpG
    AlpG Posts: 5 Forumite
    That's exactly what I thought. I guess I'm going to have to just go into this with absolute honesty. If they ask, I will be completely open but also provide proof that I have done everything in my power to rectify this and bring my financial situation back to one of complete soundness.

    Thank you for coming back to me!
  • The first hurdle you will have is getting a role in a financial services firm if you are already not in one?

    You tend to find most firms want a clean credit history. There will be exceptions where a firm will consider someone with an odd late payment or someone with poor credit if the supporting reasons are understandable and not deemed to have been driven from recklessness.

    The FCA will only want people advising who are deemed to be fit and proper to do the role. The process to get the right permissions starts with your firm vouching for you - certification process. This has to happen before you even answer any questions to the FCA. If the firm are happy with you and you have completed the FCAs forms honestly, then you will be fine.

    Advisers are expected to be honest, have integrity and ensure that they provide the right advice to avoid customer detriment. Just because you have had financial issues this shouldn't mean that you are not able to offer these qualities but unfortunately the view will be that you pose a higher risk in terms of the customer detriment. For example, it could be tempting to advise someone to do something for your own gain to meet a bill. I'm not suggesting this is you but it does happen and unfortunately a small few ensure caution is applied.

    I would say for someone in your position that it's not impossible to get an Advisers role but your route may be a bit tougher until you can sort your credit record so it shown a good period of no defaults, missed payments and that you are able to meet your commitments. How long? I don't know but the longer you can demonstrate control of your finances the stronger your case will be.

    I would imagine a good route to get you where you want to be would to work for a firm who has a route for new advisers and you can build your profile with them so they feel confident of certifying you for the role when the time comes
  • sourcrates
    sourcrates Posts: 31,950 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    I would say, for what it’s worth, if you have never been in debt, how can you possibly know how it feels ?

    My opinion, again for what it’s worth, people who have been in debt, make the best advisors, it’s like giving advice on parenting, unless you’ve been involved in the process, you really don’t have a clue.

    I wish you luck, you would hope these people have common sense when recruiting staff, I’m sure you will be fine !!
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • AlpG
    AlpG Posts: 5 Forumite
    Thank you so much for your input.

    I’m incredibly lucky in that I already have a role within financial services and have been working in the sector for several years (in support roles.) The advisers I work with know me to be trustworthy and I am confident that if/when I have this discussion with them they will know me well enough to understand why things happened and the work that I have put into rectifying it.

    The advisers I support know my honesty and work ethic and frequently comment that they would be happy to support me through to gaining my FCA authorisation. I think, from everything you said, it may be time for me to bite the bullet and have the difficult conversation with them about my situation to see what their take on things may be.

    Ultimately, I will be completely free of debt within 12 months anyway and can demonstrate both a clean payment history for the last 3 years and evidence for the events that caused my predicament.

    Fingers crossed this is enough!
  • AlpG
    AlpG Posts: 5 Forumite
    That is exactly how I view things too, Sourcrates, and have genuinely used that exact analogy. People come to advisers for help with everything from debt advice to inheritance planning, protections and retirement. If you don’t know what it feels like to be in a position where you have none of this in place, I don’t feel you can truly understand and empathise with the clients you are trying to help. As you say, it would be like taking parenting advice from someone without children; they can tell you what the books say but they can’t fully understand what you’re going through or all the little bits that you only find out through experiencing it yourself.
  • middleclassbutpoor
    middleclassbutpoor Posts: 774 Forumite
    Sixth Anniversary 500 Posts Name Dropper Photogenic
    edited 13 October 2017 at 9:30PM
    AlpG - Sounds like you are in a good position then. Does your employer not do regular credit checks, if so you would have thought they may have brought up any issues on your credit file if there were concerns so it shouldn't be anything they are concerned about. It's good to be upfront with these things though - this is the honesty and integrity values that I referred to.

    Are you fully qualified now? If not, how far off are you?

    Sourcrates - I do know what it's like to have debt. I have never been in a position where I have had issues with it. I am currently paying my debt down and am lucky that I earn well to do this.

    I also fully understand that having debt issues doesn't make you a bad person or should stop you from being an Adviser but my experience of having over 20 years in that industry, I was trying to explain to Alp that your credit record plays a very important part of being able to become an Adviser.

    I have known Advisers who have got into a financial mess and then have acted out of normal character because of the debt issues and there has been customer detriment because a client trusted the adviser and this trust was abused.

    Likewise I have known advisers who have had CCJs because of divorce, illness, parking fines going to the wrong address and had a fine outstanding record in terms of their advice.

    My response was to just clarify that the form they fill out and answer was the last hurdle in the process for Alp.

    In terms of the experience of having debt being beneficial - yes of course it is good to have that but that is probably more to do with the ability to emotionally relate to the persons situation rather than improving the advice you give someone.

    Being a parent doesn't necessarily qualify you to give advice on parenting either albeit you can empathise, sympathise and relate to other parents better.
  • AlpG
    AlpG Posts: 5 Forumite
    My situation employment wise is sort of unique and I’ve not needed a credit check so far. But, I agree and have every intention of being completely upfront about this.

    I work on the basis of treating people the way I would choose to be treated myself; honestly, openly and with integrity. It would never even occur to me to give advice that was a detriment to my client in order to better myself. Whatever it was that got me into this situation, the duty lies with me to rectify it, I would never allow someone else to shoulder any part of that burden.

    I’ve only just started taking my exams, my hope being that the lump sum I am expecting will come before I need to go through the registration. Not because I would then not disclose the situation but because I could come at it from a point of resolution rather than ongoing recovery.

    Your input has been invaluable and I cannot thank you enough. It is so helpful to have someone who actively works as an adviser offer their input.

    I will proceed as I originally intended to; open and honestly. Hoping for the best!

    I guess, if the worst happens, once I am clear and have a year or two debt free under my belt, I can reapply.
  • Good luck - sounds like you have time on your side with the exams. Im not an adviser but I hold the qualifications and I am working towards chartered at the moment so appreciate the effort you are going through to obtain the qualifications.
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