Ravinder Chahal looks at what the SPI is doing to draw attention to the positive aspects of the insolvency profession
Have you heard the one about the insolvency practitioner? He is the person who comes in and bayonets the wounded. Do you know the three great lies in life? “Of course I love you”; “The cheque's in the post”; and “I'm an insolvency practitioner, I'm here to help.”
The Society for Practitioners of Insolvency (SPI), which was founded in 1990 to represent the professional interests of licensed insolvency practitioners in the UK, whether they are accountants, lawyers or surveyors, is desperately trying to change this image for its 3,000-plus members.
Although president Brendan Guilfoyle readily admits it is like trying to push a “barrel uphill”, he is helped by the fact the SPI is not concerned with the regulation of its members. This is handled instead by the eight Recognised Professional Bodies (including the three UK law societies and the Institute of Accountants) which issue licences.
Guilfoyle does not want to disown or gloss over the harsher side of his profession, but he does want to draw attention to the more positive aspects as well. He has met considerable success on a number of fronts, especially among the media, despite the fact that one banker told him insolvency practitioners would always have an image problem unless they get rid of the “i-word”.
Guilfoyle says the SPI has produced annual corporate and personal insolvency surveys since 1991. These have produced informed comment in the broadsheets, as well as a recent report in the Evening Standard, which proclaimed women were much less likely to go bankrupt than men.
The SPI also published its first Ostrich's Guide to Business Survival at the end of October, which serves as a practical guide to avoiding financial failure for the perennially endangered small business sector. The Institute of Directors is so taken with the guide that there are already plans to distribute it to all 41,000 of its members.
Anticipating criticism of the new guide, Guilfoyle says that showing businesses how to avoid insolvency is the same as a doctor putting up anti-smoking posters in his surgery or a dentist advising patients to brush their teeth between meals – it may not mean less work, just a different type of work.
The common perception that insolvency practitioners “relish chopping the heart out of company” is simply not true, according to Guilfoyle.
He says that changes in the marketplace are helping: “Banks do not see insolvency as the panacea anymore. There is more an emphasis on constructive work.” In terms of returns to the creditor this approach produces a better yield.
Guilfoyle says these changes were helped by the 1986 Insolvency Act, which “gave us more tools in the kit bag to work with”.
The previous government learned from the US model, which promotes a “rescue culture” over insolvency whenever possible with debtors in control, and a number of voluntary arrangements as options.
The new government is continuing in the same vein because the benefits are obvious – preservation of the economic unit and employment, as well as support for the hugely important small business sector.