What is financial counselling?

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Most financial counselling services are funded by the government and all involve no fees, charges or commissions for clients. Financial counsellors are not financial planners nor professional debt managers.

Financial counsellors are different to financial planners

While financial counsellors assist people with their debts, financial planners are paid to provide investment advice.

Financial counsellors complete a Diploma of Community Services (Financial Counselling) and must be members (or qualified to be members) of a recognised National or State Financial Counselling Association.

Financial counsellors are also different from professional debt management companies. The latter charge set-up and ongoing fees to develop and sometimes monitor debt management agreements. Financial counsellors can negotiate with your creditors free as well as advise on the pros and cons of a debt agreement, informal negotiation or bankruptcy. Consumers should always seek advice from a financial counsellor before signing any debt agreement with a debt management company.

General and specialist financial counselling services

Many community organisations provide general financial counselling services to assist people who are in financial difficulty.

A number of specialist financial counselling services are also available. These include:

  • MoneyHelp financial counsellors (1800 007 007) – provide telephone financial counselling advice to Victorians who are experiencing financial difficulty;
  • Rural financial counsellors (1800 686 175) – provide free and impartial rural financial counselling to primary producers, fishers and small rural businesses suffering financial hardship; and
  • Gambler’s Help financial counsellors (1800 858 858) – provide support and advice to people affected by gambling.

What assistance is available from a financial counsellor?

Financial counsellors can assist people experiencing financial difficulty by identifying, presenting and clarifying options for money problems and by providing information and advice about:

  • credit and debt related matters;
  • the rights of debtors;
  • the pros and cons of bankruptcy;
  • working out a realistic payment plan for debts; and
  • other specialist support services including gambling, family support, personal counselling, legal aid and emergency relief.
Financial counsellors will also negotiate with creditors on your behalf or help complete bankruptcy forms.

Working with a financial counsellor

During a consultation, the financial counsellor will usually:

  • focus on providing information and advice specific to the client’s needs;
  • use all available information about a client’s financial situation to prepare a budget or financial position snapshot to highlight where their money is going;
  • ask the client about their ideas for managing the situation and regaining control over their finances;
  • advise which debts should be viewed as priority debts; and
  • advise how to apply for hardship  consideration for a wide variety of debts.

However the financial counsellor will not:

  • take over the client’s finances; or
  • deal directly with the client’s money.

Preparing to speak to a financial counsellor

To allow a financial counsellor to establish a full picture of a client’s finances, clients need to provide the following information:

  • details of income;
  • a list of all debts;
  • copies of (or information about) all loan agreements;
  • details of current and outstanding bills;
  • copies of (or information about) any court documents received; and
  • letters about bills and debts that seem urgent.

Sources:
Eastern Access Community Health brochure: Financial counselling

The funding for this fact sheet was provided by the Victorian and Australian Governments.

The information on this fact sheet is general and does not constitute legal advice.

MoneyHelp’s products and services have been prepared for the information of Victorians who are experiencing financial difficulty. Phone 1800 007 007 to speak to a MoneyHelp financial counsellor. A financial counsellor will discuss a range of debt payment options based on an individual’s circumstances.

© Copyright MoneyHelp and Consumer Action Law Centre

Last updated April 2016.