How to Become an Insolvency practitioner

If you have strong interpersonal and numeracy skills, combined with an analytical mind a career as an insolvency practitioner could be for you

Insolvency practitioners are licensed accountants or insolvency specialists who work with individuals and businesses that are experiencing financial difficulties. Insolvency is a highly regulated area so insolvency practitioners (IPs) must complete the training required in aspects of law and working practices and keep up-to-date with changes in legislation.
There are less than 2000 IPs in the UK. If you want to join this select group and take your first steps towards this demanding and rewarding career, here’s what you need to do.

Have the right qualifications

The path to becoming a licensed IP can be a long one. Ultimately, to become an IP you must successfully complete the Joint Insolvency Examination Board (JIEB) exams. These exams are tough and have an average pass rate of 25%. The average age of those sitting the exams is 33, which gives you some idea how protracted the process can be.

Before candidates can sit the JIEB exams they must be one of the following:

  • a member of one of the six registered professional bodies (RPBs)
  • a registered student of the Insolvency Practitioners Association (IPA)
  • a member or be registered with the Institute of Chartered Accountants in England and Wales (ICAEW)
  • sponsored by the Department for Business, Innovation and Skills (BIS) or the Department of Enterprise, Trade and Investment (DETI) in Northern Ireland.

While the JIEB exams are the professional examinations you must pass to become an IP, there are also a number of other qualifications that can act as a stepping-stone to this career. These include:

  • Certificate of Proficiency in Personal Insolvency (CIPP) - The first step for many people seeking a career in personal insolvency. This will give you a solid knowledge of matters of personal insolvency law and practice and is an excellent way to work towards the JIEB exams.
  • Certificate of Proficiency in Corporate Insolvency (CPCI) - This is a relatively new qualification that’s designed for those who want a career in corporate insolvency. It gives you a good grounding in all matters of corporate insolvency law and practice.
  • Certificate of Proficiency in Insolvency (CPI) - This qualification is recognised inside and outside the insolvency profession and gives you a solid understanding of personal and corporate insolvency matters.
  • ICAEW Certificate in Insolvency - This intermediate insolvency qualification is the perfect introduction to the principles of insolvency for those working within a related profession.
  • The Joint Insolvency Examination Board exams (JIEB) - These are the exams you must pass to if you want to become an IP. It is a practical exam that tests the skills and knowledge IPs use in their working lives. Before you can take the exam you must first register with one of the recognised professional bodies.

Gain insolvency experience

Although having the right qualifications is important, as you’ll see from the licensing requirements below, real-life insolvency experience is also essential. In many cases, the study complements work in a full-time insolvency position.
Those taking a job in insolvency firms might start as a trainer or office junior and be given day release so they can complete their studies and gain an insolvency qualification. Your salary will increase as you gain experience and once you pass the JIEB exam you will be able to apply to become a licensed IP.

Get your licence

Once you have passed the JIEB, you can then apply for a license from one of the registered professional bodies. There are strict rules for becoming a licensed IP, which differ between the relevant bodies. The following is a summary of the rules that apply to each:

Association of Chartered Certified Accountants (ACCA)

To apply for a license, existing members must have been a member of the ACCA for at least two years. You must also have:

  • at least three years’ practical experience under the supervision of a licensed IP or have worked in an Official Receiver’s office for at least two years after admission and membership to the ACCA
  • at least 600 hours insolvency experience
  • passed the JIEB.

Insolvency Practitioners Association (IPA)

You must be an ordinary member of the IPA and have:

  • passed the JIEB and have 600 hours of higher insolvency administration experience in the last three years
  • passed the Certificate of Proficiency in Insolvency (CPI) and have 1800 hours experience, including 1200 hours of higher insolvency administration experience.

Institute of Chartered Accountants in England and Wales (ICAEW)

Members and non-members can apply for a licence, although non-members must first apply to become an ICAEW insolvency affiliate. All applicants must have:

  • 600 hours of insolvency experience over the previous three years, half of which must be work of a type reserved to insolvency practitioners under the Insolvency Act
  • passed the JIEB exam.

Institute of Chartered Accountants in Ireland (ICAI)

Individuals must have been admitted to a practice and have a minimum of 600 hours insolvency experience over three consecutive years, with only one year of that experience gained pre-qualification.

Institute of Chartered Accountants in Scotland (ICAS)

Applicants must hold a practising certificate and have a minimum of 600 hours insolvency experience over three consecutive years, with only one year of that experience gained pre-qualification.

The Solicitors Regulation Authority (SRA)

To apply for a licence you must be a solicitor in England and Wales and hold a current practising certificate. You must also have:

  • been admitted for at least three years
  • passed the JIEB
  • a minimum of 600 hours in technical insolvency work over the last three years.

The Law Society of Scotland

Applicants must have been admitted for at least three years and be able to demonstrate sufficient experience over the last three years.

The Law Society of Northern Ireland

Applicants hold a practising certificate and have been admitted as a solicitor for at least five years. You’ll also need to satisfy the Society that your knowledge and practical experience is adequate.

Is a career as an insolvency practitioner right for you?

A career in insolvency is one of the most highly regarded routes for finance professionals, as well as being a popular route for law graduates.

The industry itself is specialist but can still provide great diversity on a day-to-day basis. It also gives you the opportunity to specialise, for instance, you might find the investigations aspect of the role particularly rewarding.

You might think working as an insolvency practitioner is all doom and gloom, but your role is to help companies and individuals turn their financial circumstances around. If that can’t be done then it is your job to salvage what you can and put them on a path to succeed once again.

Prospects for licensed insolvency practitioners are good as there are relatively few IPs in the UK.

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