Is it still worth training to be an insolvency practitioner?
Whether you believe the UK economy is slowly crawling out of recession, or that we're on the cusp of a second crunch, the boom time for insolvency practitioners appears unlikely to end any time soon.
As we've alluded to previously, an increasing number of people are considering the move across to the industry. But, with a long and gruelling training process required to qualify to become an insolvency practitioner, is it still worthwhile?
"Even if the economy recovers, insolvency work doesn't just fade away," says Peter Greaves, partner, business recovery services at PricewaterhouseCoopers. "A lot of lending deals agreed under covenant light agreements will have to be renegotiated under tougher conditions, which could give more firms cash flow and cost of borrowing issues to push them into insolvency. In short, there's typically a tail of insolvency work for 18 months to two years whenever a recession ends."
To qualify as a licensed insolvency practitioner, you have to successfully complete the Joint Insolvency Examination Board (JIEB) exams. The exams themselves are tough (there's an average pass rate of just 23%), but to even be considered you've need to be a member of a Recognised Professional Body or meet the Insolvency Practitioners Association's requirements.
Invariably, this means already being a chartered accountant, as well as having some experience working within an insolvency division under your belt. This might explain why there are so few insolvency practitioners - there are approximately 1,700 in the UK, according to figures from R3, insolvency trade body.
"There average age of those sitting the JIEB exams is 33, which gives you an idea of how tough it is," says Lee Manning, partner in corporate finance reorganisation services at Deloitte. "I would argue that it's one of the most stringent qualifications to undertake. The exams themselves are wide-ranging and incredibly technical, and it needs to be combined with extensive practical experience."
Just 266 people qualified this year, according to R3, but the need for qualified insolvency professionals is increasing, suggests Steven Law, president of the body.
"It is especially important at the moment as the current climate limits options for struggling businesses to refinance and many of them will be faced with tough decisions as further credit is no longer available from the banks. There is also a shortage of buyers out there in terms of trading a business on," he says.
Should you decide to take the plunge into an insolvency qualification, is there likely to be a job waiting for you at the end of it? Most firms, it seems, have been taking a steady - rather than frenzied - approach to recruitment.
"Because of the limited number of experienced and qualified people, they're a precious commodity, and we've tried to ensure we have looked after our team very well," says Greaves. "There are opportunities, but we're more likely to target the right people rather than indulge in rapid expansion."
