Institute of Money Advisers Annual Conference AGM 2016

Institute of Money Advisers Annual Conference & AGM 2016 “Celebrating 10 years as the IMA”

Introducing the Standard Financial Statement Gary Harvey Stakeholder Engagement Manager Money Advice Service Institute of Money Advisers Annual Conference and AGM 2016

What is the SFS? A single format financial statement for use by advice agencies and creditors A single set of common fixed and flexible expenditure categories One set of spending guidelines (or trigger figures) A savings category to build financial resilience Developed in collaboration with major advice providers, creditors, trade bodies and others Institute of Money Advisers Annual Conference and AGM 2016

Savings category • Savings category has been introduced • Expected to build savings behaviour and increase resilience to financial shocks • Understanding from major creditors this concept could aid sustainability of repayments • Non-mandatory. Limited to up-to-10% of monthly budget surplus with a cap of no more than £ 20 Institute of Money Advisers Annual Conference and AGM 2016

Testing and transition • Format of the SFS has been agreed by the governance group • User testing with front line debt advisers and creditors undertaken, with amendments made • Testing of format and spending guidelines ongoing • Implementation pilots completed with two systems • New website will handle licencing for use of SFS • Transition period to allow move from current statements to SFS Institute of Money Advisers Annual Conference and AGM 2016

Spending guidelines • Spending guidelines yet to be released • Needed format finalised first • Currently working on latest LCF survey released in May • MAS have identified volatility in LCF survey data which could make spending guidelines jump wildly up and down in coming years • We are testing a model using two years of LCF data to smooth results like these • Otherwise methodology for SFS is based on that of the CFS • First iteration expected in Summer Institute of Money Advisers Annual Conference and AGM 2016

When will it launch? • Collaborating with stakeholders on implementation timelines • Dependent on timelines, we anticipate a launch late 2016 / early 2017 • In process of planning further training events and materials • Entering Scottish legislation • Engagement programme • User guidance and licensing to be agreed Institute of Money Advisers Annual Conference and AGM 2016

Demo of the Excel tool • No major changes for income • Several categories have moved from flexible outgoings (with spending guidelines) to fixed outgoings • Travel • Health costs (prescriptions, opticians, dentist) • School trips • Clearer separation of flexible costs • Many of CFS ‘Other’ category redistributed across three SFS flexible expenditure categories (toiletries, leisure courses, hobbies) • Savings tab, debt management fee, comments split Institute of Money Advisers Annual Conference and AGM 2016

Group task • Initial reactions • From SFS launch, what do you need from MAS to aid smooth transition? Consider communications, printed material, training, systems etc. Opinions on useful training materials for advisers – online, workshops, video / webinars etc. • Discuss how advisers see a savings category operating in practice. Are the boundaries clear? To what extent do they see clients currently making savings contributions? • With a greater focus on providing useful commentary with the SFS, what do advisers view as current best practice regarding notes supplied with statements? What is the split between statement and covering letters? Institute of Money Advisers Annual Conference and AGM 2016

Questions & contact us Contact email for SFS sfs. support@Money. Advice. Service. org. uk Download the 2014 consultation paper https: //www. moneyadviceservice. org. uk/sfs-consultation Download the consultation response https: //www. moneyadviceservice. org. uk/sfs-consultation-response Visit the SFS website https: //sfs. moneyadviceservice. org. uk/ Find out more about our debt work https: //www. moneyadviceservice. org. uk/our-debt-work Download the latest publications relating to our debt work https: //www. moneyadviceservice. org. uk/debt-publications Institute of Money Advisers Annual Conference and AGM 2016