The OFT misses an opportunity - part 2

See my previous post in June for the first instalment!

Once again, the OFT is demonstrating that it has missed the point on their own review of the Insolvency Profession - see the article in Accountancy Age here. The OFT is proposing an independent complaints body be set up to deal with complaints against Insolvency Practitioners ("IP's"), funded by a levy against the IP's themselves. This levy is simply likely to put up the cost of what is already perceived to be an expensive profession.

Every professional (be they lawyer, accountant, financial adviser etc) will inevitably have complaints made against them when clients aren't happy. Genuine complaints, based on the professional making a mistake, I feel are few and far between. Most "complaints" against IP's usually arise because a complainant doesn't understand why the IP has done something in particular and they feel they have been disadvantaged. This stems from a simple lack of knowledge by the complainant in relation to what is a highly legislated (and particularly these days) highly regulated area of expertise. The secret to avoiding complaints to start with is effective communication and ensuring those affected when a company becomes insolvent (e.g. employees, directors, creditors etc) fully understand what an IP has to do and how he needs to do it.

There are already mechanisms in place for making and dealing with complaints against IP's - setting up yet ANOTHER body is totally unnecessary and just further muddies the waters. I suppose that it will inevitably happen, but my opinion is that it isn't needed.