What's Happening?

Facebook Twitter Youtube Linkedin

NEED HELP? QUESTIONS@FIA.ORG.ZA

become A FIA member TODAY
member login

How to help clients deal with bad debt

ARTICLE BY

  • Ayanda Ndimande

SHARE THIS POST

South Africa: 11 August 2020: 10 million South Africans have bad debt according to the Debt Counselling Association. Debt Rescue further reports that 85% of South Africans are in need of help financially, emotionally or both, right now. In a dire economic climate, intermediaries can play a pivotal role in guiding clients by offering practical, objective advice when it comes to credit and a holistic financial plan. 

Ayanda Ndimande, Business Development Manager of Retail Credit at Sanlam, says most intermediaries are cognisant of their clients’ financial needs right now and play a very supportive role, both financially and emotionally. She notes, though, that there is much benefit to be derived from also proactively assisting clients through tough credit conversations. “The loss of income and jobs has resulted in a depletion of savings and investments. People need guidance on what to do. Intermediaries can offer substantial value by guiding clients on how to manage credit effectively as part of a bigger, long-term strategy.” 

 Below, Ndimande highlights some practical steps intermediaries can consider to help their clients deal with bad debt: 

1. Analyse your client’s credit position

As an intermediary, shift your focus to address the other side your clients’ balance sheet by critically analysing their credit position during the financial planning process. This will enable you to make recommendations to your client on how to grow or retain wealth. Importantly, not all debt is bad and a thorough analysis can, indeed, help your clients to understand their credit position from all angles. 

However, when people are so far in the red that they are no longer able to service debt comfortably and run the risk of cancelling crucial financial products like life cover or retirement planning, then it’s time to take action. Using budgeting as a tool and possible debt consolidation can free up cash flow. In drastic situations, a client may benefit from a debt management process. Also consider advising clients to speak to their creditors to make arrangements that they can afford.

2. Remind your clients of your services and how you can be off assistance

Intermediaries know the importance of remaining in contact with their clients during uncertain times. Proactively reach out to people to address their concerns and help to reprioritise their finances. By understanding your clients’ credit profiles, you gain an overall perspective on their financial position to offer optimal guidance in the circumstances. By providing trusted advice timeously, you may help your clients to emerge from this period still financially secure, even if that means putting savings or investment goals on hold for a while. 

3. Educate your clients about engagement of digital platforms

Encourage your clients to take control of money matters by knowing their credit position. Guide them to access their credit profile via Sanlam’s newly launched credit dashboard. This provides an insightful credit profile, a credit dashboard to track one’s financial journey, and free access to a credit management coach. Together with this coach, you can powerfully impact your client’s financial wellbeing, now and in the long-term. 

Ndimande concludes, “The pandemic has taught us to view financial management in a holistic manner, and to consider credit as an essential part of our finances. Now, more than ever, people need holistic guidance from their intermediaries to know their credit position and to apply the tools to actively address debt, through practical, incremental steps.”

Subscriber Terms and Conditions

  1. APPLICATION OF TERMS
    • These terms and conditions (“Subscriber Terms”) apply to the subscription by any qualifying member of the South African Underwriting Managers Association NPC (“SAUMA”) to the services and benefits offered by FIA Services (Pty) Ltd (“FIA Services”) under the SAUMA affiliation arrangement (“Subscription”).

  2. NATURE OF SUBSCRIPTION
    • A Subscription under this arrangement:
      • does not constitute membership of FIA NPC;
      • does not confer any voting rights or governance participation in FIA NPC; and
      • is governed solely by the contractual relationship between the Subscriber and FIA Services.

  1. ELIGIBILITY
    • To qualify for the Subscription, the applicant must, at the time of application, be a current paid-up member of SAUMA.
    • FIA Services will verify the applicant’s SAUMA membership status with SAUMA prior to activation, and may re-verify such status periodically.
    • If a Subscriber ceases to be a paid-up member of SAUMA, the Subscription will correspondingly be terminated.
    • Applicants are required to authorise FIA Services to confirm their SAUMA membership status with SAUMA as part of the application process.

  1. SERVICES
    • The Subscription entitles the Subscriber to the following benefits:
      • Complimentary access to the FIA CPD Platform;
      • Complimentary access to the FIA Insight Magazine (digital edition);
      • Advertising opportunities on FIA platforms at a discounted rate of 15% (fifteen percent) off the prevailing published rates; and
      • Invitations to attend FIA Technical Webinars annually.
    • FIA Services reserves the right to update, vary or substitute the Services from time to time, provided that the overall value and nature of the benefits remain materially the same.

  1. FEES AND PAYMENT
    • The monthly subscription fee is R260.00 (two hundred and sixty rand) for up to seven registered individuals (Key Individuals and Representatives), and R36.00 (thirty-six rand) per additional registered individual thereafter, excluding VAT.
    • The Subscriber shall provide FIA Services with the required details of each individual to be registered under the Subscription for the purposes of activation and billing.
    • All fees are exclusive of VAT, which shall be charged at the prevailing statutory rate.
    • Subscription fees are reviewed annually in March and may be adjusted with effect from 1 April.
    • Any changes to the Subscription, including but not limited to the number of Representatives and Key Individuals registered under the Subscription, may only be effected once annually during the annual review period in March of each year, with such changes taking effect from 1 April.
    • Subscription fees shall be billed monthly in arrears, unless the Subscriber elects an annual billing cycle at the time of application.
    • The Subscriber shall ensure that all billing information (including contact details, authorised signatories and bank account details) is kept accurate and up to date.
    • Non-payment of subscription fees may result in suspension of access to the Services until such fees are brought up to date.
    • The Subscriber acknowledges and agrees that all subscription fees payable under these Subscriber Terms may be collected by way of debit order, which shall be processed by the holding company, FIA NPC (The Financial Intermediary Association of South Africa), on behalf of FIA Services. Payment to FIA NPC shall be deemed to constitute valid and sufficient discharge of the Subscriber’s payment obligations to FIA Services under these Subscriber Terms.

  1. ONBOARDING
    • Onboarding will be conducted as a Subscription with FIA Services under the SAUMA affiliation arrangement.
    • Onboarding will not confer FIA NPC membership status or any associated rights.
    • Onboarding is conditional on confirmation of the Subscriber’s current SAUMA membership at the time of application

  1. DATA PROTECTION
    • FIA Services will process all personal information in accordance with the Protection of Personal Information Act 4 of 2013 (POPIA) as set out in our POPIA policies.
    • By subscribing, the Subscriber authorises FIA Services to confirm their SAUMA membership status with SAUMA and to process personal information for the purposes of fulfilling the Subscription.

  1. TERMINATION
    • The Subscriber may terminate the Subscription by giving FIA Services one calendar month’s written notice.
    • FIA Services may terminate the Subscription on one calendar month’s written notice, or immediately if the Subscriber breaches these Subscriber Terms and fails to remedy such breach within 14 (fourteen) days of receiving written notice.
    • Termination of the SAUMA–FIA Services affiliation agreement shall not automatically terminate these Subscriber Terms.
    • Termination by the Subscriber shall not relieve the Subscriber of liability for any subscription fees accrued up to the effective date of termination.
    • FIA Services may suspend or terminate the Subscription with immediate effect in the event of non-payment of fees by the Subscriber.

  1. GENERAL
    • These Subscriber Terms are governed by the laws of the Republic of South Africa.
    • Any disputes arising under these Subscriber Terms shall be dealt with in accordance with the dispute resolution provisions contained in the FIA NPC membership terms and conditions, as modified to reflect that the contractual relationship is with FIA Services.
    • Any notices required under these Subscriber Terms may be validly delivered by email to the addresses provided in the Subscriber’s application form, and such notices shall be deemed received on the day of transmission if sent during business hours.
    • The Subscriber may not assign, cede or transfer any of its rights or obligations under these Subscriber Terms without the prior written consent of FIA Services.
    • No variation of these Subscriber Terms shall be of any force or effect unless reduced to writing and signed by both FIA Services and the Subscriber.