A Career Change to Insolvency

A career in insolvency is perhaps not everyone’s first choice. However, it is still one of the most highly regarded routes for finance professionals today.  This article seeks to review why this is, and highlights how many people actually fall into an insolvency career after studying law or accounts…

No training contract? Struggling with advanced accounts?

It is a little known fact that many insolvency professionals have ended up choosing insolvency as their finance career as a result of either completing a law degree and the LPC, but then failing to get a training contract, or from studying for an accountancy qualification but then finding the advanced stages to be a struggle.  It’s actually a really common trait in the insolvency world due to the ever-decreasing opportunities to gain a training contract with a firm of solicitors and the increasing complexities of the accountancy profession.

The insolvency world is made up of many professionals with an aptitude for both accountancy and an ability to understand the complexities of law, but who also have strong skills in client facing tasks with an emphasis on advising.

I am aware of many a graduate with an LPC qualification that didn’t want to waste their skills by working in industry, so gave insolvency a go and never looked back.  Frankly, as a person who never went to university and who didn’t finish off their ACCA qualification, I am always grateful to work alongside law minded individuals who can help me interpret the ever changing insolvency legislation.

I am not saying that insolvency is only full of students who have dropped out of their chosen subjects, as there are still many fully qualified accountants and highly academic individuals in the industry.  However, it is not the be all and end all to study with an aim to become an accountant or a solicitor but then eventually not pursue those professions.

Why choose insolvency instead of accountancy or law?

Firstly, it is worth pointing out that Insolvency is still law based, as insolvency professionals are governed by the Insolvency Act 1986, the Companies Act 2006 and many a guideline or statutory procedure.  Therefore, a large majority of the role of an insolvency professional involves law based skills. Given that insolvency generally involves preparing basic accounts of some sort, together with reviewing the records of the businesses and individuals in which you are advising, accountancy also forms a large part of the profession.

The main reason why, in my opinion, insolvency should be chosen above any other finance career, is that each day is made up of different amounts of these accountancy and law tasks (along with advisory work).  Therefore, the variety of the day to day work keeps the role interesting.

Also, one big favourable point to this profession is that if you manage to turn around a failing business, or get an insolvent individual back on track, it can be extremely rewarding.

What is involved in changing to insolvency?

Your first step on the ladder usually involves taking a job with an insolvency firm as either an office junior or a trainee of some sort. Most insolvency firms will offer you the opportunity to continue studying on day release, either towards completing your current studies in accountancy, or gaining an insolvency qualification.  Your initial salary may not be quite as high as you’d like, but there is a lot to learn in order to become competent in advising clients. Your salary will however increase very quickly as you gain passes in each exam you take.

What insolvency qualifications can I study?

Aside from starter courses, there are two main qualifications of note.  These are:

  1. The Certificate of Proficiency in Insolvency (CPI) – The qualification new professionals to the insolvency industry usually take (and some experienced professionals looking to push on to the next level).  Its complexity is no more difficult than a degree. It is one exam, partly made up of multiple choice questions.  It is considered a notable achievement to insolvency employers and a stepping stone to full qualification as a licensed Insolvency Practitioner.
  2. The Joint Insolvency Examination Board (JIEB) – This is the qualification you must pass in order to become a licensed insolvency practitioner.  It is made up of three separate exams and designed to be taken by experienced professionals. It’s known in the profession as being extremely difficult, but once gained the rewards make the many hours studying all worthwhile.

Article by Ben Robson, Licensed Insolvency Practitioner at Bridge Newland Limited.  For more information and articles on insolvency related topics you can visit www.bridgenewland.com