What is a financial counsellor and how can they help you?

By Fiona Guthrie, CEO of Financial Counselling Australia

Photo Credit: Scott Jewell, ABC.

Anyone can find themselves in financial difficulty. You might lose your job, get sick, or your relationship might break down. You may simply not have enough money to make ends meet. If this happens to you, a financial counsellor can help.

Financial counsellors are nonjudgmental, qualified professionals who provide information, support and advocacy to people in financial difficulty. Their services are free, independent and confidential.

They work in not-for-profit community organisations, including welfare and counselling agencies, gamblers help services and community legal centres. A number of them work mainly with First Nations people.

Their services are delivered face-to-face, or through the National Debt Helpline’s phone line or live chat. If you’d like to speak to a financial counsellor, the best place to start is the National Debt Helpline website.

In contrast to financial planners or advisors, who provide wealth creation strategies, financial counsellors offer practical advice to help people who have debts and are struggling to meet ordinary living expenses.

They’re experts in consumer and social security law, bankruptcy law, industry hardship obligations/codes and working with industry ombudsmen, as well as being skilled counsellors.

A financial counsellor’s job is to listen to your story, understand your money situation and look at the options you have. You may not think so, but everyone has options to help them get back on track.

How can a financial counsellor help you?

Each appointment or conversation with a financial counsellor will be slightly different depending on your situation at the time.

Here are some of the ways in which financial counsellors can help if you’re experiencing financial hardship. They can:

  • Explain which of your debts are priorities. Not all debts are created equal, for example, people with mortgages will normally want to prioritise these payments, rather than for unsecured loans.
  • Understand the other factors affecting your situation, such as health, abuse, stability of employment, relationship status, or your housing circumstances.
  • Assist you to develop a money plan. This may highlight ways of increasing your disposable income.
  • Provide advice about how to address issues with bills and debt, such as negotiating with creditors, accessing hardship variations, whether early access to super makes sense and so on.
  • Advocate and negotiate on your behalf with creditors or lodge a dispute in external dispute resolution.
  • Provide information, for example, about how the credit reporting system works, what is acceptable behaviour from debt collectors and the impacts of bankruptcy.
  • Identify if you need a referral for other support, such as emergency relief, personal counselling, or legal and health services.
  • Provide emotional support. Financial counsellors are great listeners and you may find that discussing your money worries takes a weight off your shoulders.

What don’t they do?

Financial counsellors are sometimes confused with financial planners or financial advisors, but the services provided are quite different. They don’t:

  • Charge money for their services.
  • Receive any payments or commissions from third parties.
  • Hand out emergency relief grants or money.
  • Complete tax returns.
  • Provide investment advice (that’s what financial planners do).

Who funds financial counselling?

Financial counselling is funded by both the Federal and State governments. The service is free so that people in acute financial difficulty can get professional advice without conflict of interest.

How to access financial counselling?

If you’re struggling with debts or feeling worried about your financial situation, your first port of call should be the National Debt Helpline website. If you can’t find the answer to your query online, call 1800 007 007.

A financial counsellor will assess your situation and provide you with free advice. If your matter is more complex, they can refer you to your closest face-to-face financial counselling service.