Spurring Innovations in Credit Counseling: Lessons from the Smart Growth Innovation Program July 19 th , 2017
Spurring Innovations in Credit Counseling: Lessons from the Smart Growth Innovation Program
July 19th, 2017
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Housekeeping
Prosperity
Now’s mission
is to ensure
everyone in our
country has a
clear path to
financial stability,
wealth and
prosperity.
Our Unique Promise
We open doors to opportunity for those who have been kept
off the path to prosperity.
We help people build wealth by making sure they have
what they need to build a better future.
We enable meaningful mobility through research, policies and
solutions.
Challenges and Opportunities in Credit Counseling
Overview of the Smart Growth Program
Problems and Solutions: Guidewell
Lutheran Social Services
Clarifi
Other Takeaways and Implications
Audience Q&A
Next Steps
Today’s Agenda
Today’s Speakers
PAMELA CHAN
Project Director,
Prosperity Now
EMILY HOAGLAND
Sr. Research Mgr.,
Prosperity Now
JAMIE LUTTON
Manager, Capital OneKIMBERLY ALLMAN
Director, Capital One
Today’s Speakers
SCOTT KAROL
VP of Innovation,
Clarifi
ELAINA JOHANNESSEN
Program Director,
LSS Financial Counseling
DEVON HYDE
Director of Business
Development,
Guidewell Financial
Credit Counseling Field:Challenges and Opportunities
JAMIE LUTTON
Manager, Capital One
Smart Growth is an innovation fund created to help agencies enhance client outcomes and advance the industry
Objectives:
• Think strategically about key industry problems and explore
innovative solutions
• Introduce client-centered research and design methods to credit
counseling agencies
• Provide opportunities for collaboration and peer-learning
Year 1:
Strategic Ideation
Year 2:
Launch Grants
Year 3:
Report & Share
Smart Growth is a 3-year program which funded six agencies to develop and test solutions to address industry challenges
• Agencies identified challenges
• CFED provided technical assistance and information on human-centered design
• Two convenings
• 3 agencies evaluated their solutions using pilots and test and learn techniques
• Convenings held to share challenges and successes
• Communicate results, findings, recommendations
• Support industry by sharing best practices and lessons learned
Overview of the Smart Growth ProgramPAMELA CHAN
Project Director,
Prosperity Now
Smart Growth Innovation Process
Summary of Projects in the 2015-2016 Smart Growth Innovation Program
Location Baltimore, MD Duluth, MN Philadelphia, PA
Discovered
Challenges
How might we help more
eligible clients enroll in a Debt Management Plan?
How might we help clients weather financial volatility?
How might we help clients
not on a Debt Management Plan manage their debt?
Designed Solutions
New client-centered
counseling approach
New resources to engage clients
around potential volatility
A new bill payment program
Testing Results
Elicits same level of
appeal with
consumers as
original approach
Implementation
issues revealed
opportunity for
training and refinements
Generally appealing to
consumers
More research and
development needed to
understand complexity of
managing volatility and ensure effectiveness
Generally appealing to
consumers
Flaws in current design
limit potential appeal if implemented as is
Smart Growth Projects and Solutions
GUIDEWELL FINANCIAL SOLUTIONS
DEVON HYDE
Director of Business
Development, Guidewell
Financial Solutions
How might we help more eligible clients enroll in the DMP program?
Challenge
Guidewell Financial’s target audience for this project includes clients who:
Took part in a credit counseling session with Guidewell Financial;
Were recommended a DMP by their credit counselor; and
Did not actively decline the DMP.
Target Audience
Clients may not understand the next steps to take after their credit counseling call.
Clients are not receiving holistic follow up that could help them improve their financial situation.
Clients may not understand the benefits of a DMP program over other options to manage their debt.
Key Underlying Barriers
Guidewell Financial developed a new client-centered counseling approach designed to more actively engage clients in the credit counseling appointment to allay fears and get them to buy into the benefits that Guidewell Financial provides.
High-Level Solution Overview
Fact Sheet Call Flow Guidance
Tested Solution
Payout Forecast Redesigned Case Action Plan
Tested Solution
Screen Sharing
Tested Solution
LUTHERAN SOCIAL SERVICES
ELAINA
JOHANNESSEN
Program Director,
LSS Financial
Counseling
We are the only full-service, community based
financial counseling and financial education
provider in the greater Duluth and Superior
area.
LSS Financial Counseling
• Since 1987
• Serve 10,000+ families and individuals per year
• NFCC Certified Financial Counselors
• 10 locations in MN & WI for in-person sessions
• 90% of clients in MN, Nationwide online and phone
• Bilingual services – English, Spanish, Hmong
• Financial Education Presentations
We believe people can conquer their debt, gain control of their finances, and achieve financial stability.
Financial Counseling Services
Credit Report Reviews
Deep Budgeting Counseling
Student Loan Counseling
Foreclosure Prevention Counseling
Reverse Mortgage Counseling*
Free and confidential*Fees only for clients outside of MN or WI
Debt Management Plans
1 monthly payment to LSS
On-time, faster repayment improves credit
scores
Debt paid in full, but faster and less interest
Coaching and tools to support success
85% success rate
How we make a difference:
• Less Stress – Expert coaching on moving from paycheck-to-paycheck living toward financial wellness.
• Strategic Plan – Individualized budget counseling and financial action plans to help reduce financial stress.
• Conquer Debt – Structured plans to repay debts faster and in full and improve credit.
• Trusted Support – Certified financial counselors available to help people take back control of their finances and avoid scams.
• Educate for Life – Financial education classes delivered to employers, schools, churches, and community groups.
How might we help clients weather financial volatility?
Challenge
All DMP clients from intake to completion
As of December 1st, LSS has approximately 2700 clients
Target Audience
Clients sometimes have trouble sticking to the budget and action planfrom their counseling session because they don’t have enough money.
Clients have trouble following through on their budget and action plan because of chaotic lives and social pressure.
Clients don’t have a concrete and detailed backup plan in case something goes wrong (i.e. loss of income or unexpected expenses).
When they experience financial volatility, clients lose hope because they don’t know there are options that can help.
Clients don’t know that they can contact LSS when they are at risk for missing a payment.
Clients don’t fully understand the DMP process and timeline(particularly immediately after the start of the DMP).
Key Underlying Barriers
1. Rebranding of client services to the DMP Support Team page with pictures and biographies of team members.
2. A simple, colorful client/DMP roadmap infographic to reduce confusion about the DMP process.
3. An individualized, user-friendly web portal for DMP clients.
4. A back-up planning tool to help clients create a back-up plan and prepare for a future financial emergency.alendarsynced with checklist, auto reminders
Solution Overview
DMP Support Team Page
Roadmap
Portal Dashboard and Calendar Pages
Back-up Planner and Completed Plan
User and Concept Test Resultsand Next Steps
DMP Web Portal User Test (Current and former LSS clients): Testers found it easy to use and potentially very helpful
Will implement when feasible with Client Management System software
Back-up Planner User Test (Current and former LSS clients): Testers were strongly in favor of the Back-up Planner
As long as it was simple to complete and was not time consuming
Concept Test (National audience): Consumers found the Back-up Planner tool appealing
Liked that it encourages planning and helps with emergency preparedness
More research and development needed due to complexity of managing volatility and to ensure effectiveness for all consumers
CLARIFISCOTT KAROL
VP of Innovation, Clarifi
Our Mission
We create hope by helping people identify
and secure the most important assets in
their lives.
How Clarifi Can Help
Budget, Credit & Debt Counseling
Housing Counseling Special Programs
Education
Clarifi Services
How might we help clients not on a DMP with their debt?
Challenge
Clients who have disposable income or options to cut spending
Approximately 40-50% of clients
Target Audience
Clients are overwhelmed by the stress and complexity of their financial lives.
Clients underestimate and avoid calculating everyday expenses.
Clients have immediate money management needs that have to be addressed before they can focus on long term goals.
Clients don't have access to long-term debt reduction support.
Clients aren't aware of the role Clarifi can play.
Key Underlying Barriers
Solutions Overview
When people call Clarifi, they will begin
a holistic intake process where they
can talk to trained Clarifi staff about
why they called. The counselor will
explore the client’s financial situation in
detail including gaining some
understanding of the client’s debts,
assets and financial goals.
The major goals of this piece of the
solution are to increase client buy-in
and trust before the first full session
and to reduce the breadth of topics in
the full session.
New Intake Process
Bill Payment Program Overview
Other Takeaways and Implications
EMILY HOAGLAND
Sr. Research Mgr.,
Prosperity Now
Program Design Tips for Credit Counseling Agencies
Make sure resources offered in counseling facilitate
action.
Continually check for consistency in implementation.
Draw on peers for resources to help solve tough client
issues.
Check your assumptions and seek clients’ perspectives.
Opportunities for Future Innovation
1. Helping people experiencing chronic financial instability
manage existing debt.
2. Helping people avoid paralysis when it comes to managing
debt.
3. Helping people manage highly complex debt portfolios.
4. Helping people know who to trust for help managing debt.
5. Providing more specific guidance on managing debt.
6. Sustaining support and engagement on managing debt.
Audience Q & A
What questions do you have?Share them in the
Questions box!
Next Steps for Smart Growth
Coming Soon
Project brief highlighting the three tested
Smart Growth projects:
Spurring Innovations in Credit Counseling: The
Smart Growth Innovation Program
Web Portal containing more specific info on
the human insights methods and tools
Webinars providing guidance for using the
human insights process and its methods
Smart Growth Innovation Brief: Spurring Innovations in Credit Counseling: The
Smart Growth Innovation Program
https://prosperitynow.org/resources/spurring-innovations-credit-counseling
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