Good insolvency regulation, and why it’s important
16 September 2025
By Marcial Boo, Chief Executive at the Insolvency Practitioners Association.
People tend not to like regulation. It conjures images of clipboards, tick boxes and reprimands. It's the same across all sectors: teachers don't like Ofsted; doctors dislike the General Medical Council; and no one likes traffic wardens. Insolvency Practitioners (IPs) may feel similarly.
But regulation serves an important role. It helps us to live in a fair, rules-based society where we trust that restaurants, doctors, toys and much else are all broadly safe to use. It's the same in insolvency. With good regulation, debtors can trust the advice they receive, creditors can have confidence that they will be reimbursed fairly, and IPs can be on a level playing field with competitors and know that any cowboys will be called to account.
As the Chief Executive of four regulators over 11 years, including the IPA, and the Chair of the UK's professional body, the Institute of Regulation, I've seen that good regulators maximise compliance with minimum burden. That's made easier because, in every sector, most people mostly comply. In insolvency, compliance means IPs passing exams to be able to practice, completing their annual CPD to stay up to date, and complying with standards of practice, such as SIPs, Codes of Ethics and anti-money laundering (AML) obligations. The IPA's job, as the UK's only regulator focused exclusively on insolvency, is to support IPs (and prospective IPs) to reach and maintain these standards.
The good news is that IPs mostly comply. The IPA promotes compliance with the rules, and with AML obligations, in three ways: through inspections, by handling complaints about IPs, and by working with larger providers of Individual Voluntary Arrangements (IVAs) and Protected Trust Deeds (PTDs) as part of an IPA-specific firm scheme. In 2024, we gave 79% of the IPs we regulate a satisfactory report following an inspection. In only 10% of cases did we need to agree a consent order with the IP to ensure improvements in standards following evidence of misconduct. And there was just one case where we imposed a restriction on the IP's licence to practice.
It was similar for IVAs. Our monitoring of IPs and firms in 2024 found that compliance with professional standards was high. There were examples of misconduct in just nine cases following complaints. And public concerns about IVA providers were raised in only one in every 500 cases, and in under one in a thousand PTDs.
These high levels of compliance among IPs are welcome and reflect the strong professionalism of the sector. But it's also right that the IPA, as a regulator, reminds IPs to maintain focus. In 2024, a few IPs gave poor guidance on the suitability of debt options; others failed to record decisions adequately, or delayed reimbursing creditors, or issued misleading advertising. The IPA's job is to highlight such issues, so as to promote everywhere the high standards of most IPs.
Good regulation should not be punitive, but supportive, pointing out not only areas for improvement but good practice to encourage learning. Good regulation focuses on people as well as systems and processes. That's why IPA inspectors try to build good relationships with IPs and their firms so we can better understand the context they work in and to offer support where needed. In practice, this means not only sending inspection reports with recommendations but also ensuring that IPs are updated on the developments from government and our inspection findings via our programme of conferences, roadshows and other events across the UK. Ongoing CPD helps IPs to maintain the high standards they first acquired when taking entry-level qualifications such as the Certificate of Proficiency in Insolvency (CPI) or in Personal Insolvency (CPPI) or when passing the regulatory license-giving threshold of the Joint Insolvency Examination.
This regulatory approach is understood. But improvements are necessary. The UK Government is considering changes, such as introducing the regulation of insolvency firms as well as IPs. The IPA welcomes such change. But our ambitions are greater. It may indeed be time to review more widely a regulatory regime that has not been updated since 2015 to reflect technological and market changes since then. Some current regulatory requirements on insolvency firms are time-consuming and may provide limited assurance. They could be simplified to reduce regulatory burdens and help debtors and creditors alike.
In addition, better collaboration is needed between insolvency regulators and the Insolvency Service to reduce duplication and the cost to firms and IPs. The IPA is committed to efficiency, and we will introduce a modern IT portal for IPs in 2026 to cut out unnecessary emails and form-filling. The Government wants to reduce regulatory burdens. So does the IPA, and we will play our part.
Regulation may not be liked. We understand. That's why we want the IPA's regulatory approach to be effective and efficient. But standards matter too. So, we will continue to work with IPs to maintain the high standards often already in place and be ready to respond to future challenges.
