Individual voluntary arrangements are officially hot. Treated by many in the insolvency industry as small fry and left to a few smaller firms and IVA factories to handle, bigger practices have now realised that there is money to be made from the burgeoning area
With numbers of IVAs expected to climb due to the introduction of the
‘simple’ IVA next year, and regulation for the industry still in its infancy,
firms have come up with schemes to manage the workload, and offer more services
to clients.
Despite the Insolvency Practitioners Association’s efforts to work with the
newly-formed Debt Resolution Forum to create a self–regulatory arm for the body,
Grant Thornton has got in on the act and set up a new assurance service for debt
management businesses and IVA factories.
The firm has launched what it describes as the first audit service to provide
assurance to creditors and lenders that IVA factories and debt management
companies are correctly following legislation and providing best practice
advice.
The service could be viewed as usurping the efforts of the Insolvency
Practitioners Association to set a regulatory regime for the industry.
The firm’s announcement follows the news that one of the biggest debt
management businesses, Debt Free Direct, refused to join the forum until it was
clear it would set a high enough regulatory standard. DFD’s finance director
Paul Latham cited his company’s own efforts to provide assurance to both
creditors and debtors by opting for an independent audit of its work by an
unnamed accounting firm.
And debt manager TDX has set up an exchange to streamline dealings between
individuals, their advisers and creditors, which includes HSBC as a major backer
of the scheme.
IPA chief executive Nick Sabin has attempted to ally fears of breakaway
groups or competing standard setters among the industry.
The forum’s regulatory standards will be set by February 2007, and Debt Free
Direct will join the forum soon after that, Sabin believes.
With the banks looking to open greater dialogue with the debt industry, Sabin
recommends the forum takes up the offer of working closer together to provide
the best results for both debtors and creditors, and has repeatedly backed
proposals that look to create best practice in the insolvency process.
It seems the next year could see as much change for the industry as it has
undergone in the last 12 months.