Guardian Debt Management has warned brokers to avoid unscrupulous debt advice firms charging large up-front fees.
The company claims these firms, which also frequently offer high referral fees, risk damaging future client relations for the intermediary.
The debt solution specialist says intermediaries should embrace the benefits of debt advice to help clients with financial concerns, but they should not form allegiances with firms charging large up-front fees which could result in additional problems for clients further down the line. It says fee structure transparency should be the key element when referring clients to such firms.
David McCann, managing director at Guardian Debt Management, says the charging of such large fees upfront is completely unethical.
He says: "A large referral fee can appear tempting in the current economic climate but intermediaries need to take the long term view as it is imperative that their client will be properly looked. Ultimately if this is not the case then it will reflect badly on the introducer and may result in a loss of further business and potential referrals."
"Intermediaries should be doing thorough checks on potential partners across the whole of the industry and this is especially applicable for those looking to debt solutions. The sector continues to be tarnished by a rogue element but it is important to stress that there are good firms out there that can offer genuine solutions to clients while opening up new revenue streams for intermediaries," he concludes.IFAonline
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