Last week’s decision by the Society of Practitioners of Insolvency to change its name and structure marks its biggest shake-up since it was formed in 1990. The move, to create the Association of Business Recovery Professionals, was led by SPI president Alan Bloom. It is the most concrete evidence yet that the profession has acknowledged the need for change, arising from shifts in the needs of business and government-backed initiatives to encourage entrepreneurship. Bloom comfortably achieved the majority necessary to push through changes that will mean complete reform to recognise the importance of informal insolvency procedures, both through the society’s name and through widening the membership to unlicensed practitioners. Less than 10% of the SPI’s membership voted against the initiatives. In contrast, almost 600 practitioners backed plans to turn the society into one reflecting the recovery aspects of work, rather than stressing the ‘insolvency’ word. This has been blamed time and again for giving license holders a bad press. ‘The change will enable us to communicate clearly the work we do to sort out businesses’ financial problems. It will encourage directors and managers to seek advice from our members at a much earlier stage, when options for rescue are more open and achievable,’ says Bloom. Critics of the plans claimed that the term ‘insolvency’ was simply the description of a type of work they do and that changing the focus would not achieve anything. Many firms, particularly mid-tier firms, also felt that the proposals for change were dominated by the needs of the Big Five, who are far more heavily involved in recovery work. But the 78% who voted in support of change came from a mixture of small and large firms and Bloom confirmed the vote was heavily tilted in favour of smaller accountancy practices. So what happens now? The name change is only a part of the equation, and although an important one, will be backed by a number of other initiatives to open up the membership of the new body. It will only be a matter of weeks until the new name is registered at Companies House, while a steering group has been set up to move the process of finding new members forward. They will be drawn from a number of sources including the legal and banking industry, as well as from those familiar with rescue procedures. Although only licensed insolvency practitioners will be able to practice formal procedures, the new members will have to abide by a strict code of conduct with the aim of building up the professionalism among recovery advisers. New members will eventually have their own exam to enable the kitemarking of insolvency practitioners to be extended. Buchler Phillips managing partner Simon Freakley said: ‘Insolvency professionals have been doing turnaround and rescue work for years with very real success and so the name change reflects the broader type of work we have been carrying out. ‘In terms of the inclusion of experienced turnaround professionals not currently in the membership of SPI, we recognise that there is a broader community of professionals doing this type of work. ‘It is entirely appropriate that we should all be members of, and represented by, the same professional body.’
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