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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