So, who is doing IVAs? Latest market share figures

Our last blog, pointed out that IVA case numbers are rocketing away. January figures from the Insolvency Service show that IVAs (just under 60,000 in 2017) rose to over 71,000 in 2018. But, just who is doing all these cases? There are some thought-provoking changes going on.

Too few cooks?

In recent years, creditors have worried that the IVA market has concentrated into the hands of too few players. This concern has been recognised by the Insolvency Service to the extent that the largest two have been invited onto the IVA standing committee. Better to have them inside the tent…, perhaps? Free debt advice organisations have also expressed concern about this concentration of market power, amidst reports from coal-face advisors that they are seeing more cases of what they think is miss-selling by lead generators and debt packagers who pass cases to IVA firms – often at very low levels of disposable income.

People predicted that, by now, there might only be two or three IVA suppliers left. Well, that hasn’t happened

Back in 2016 people predicted that, by now, there might only be two or three IVA suppliers left. Most thought this a bad thing. Well, that hasn’t happened. Whilst one swallow doesn’t make a summer,  many will welcome what looks like a  bigger role for second-tier firms.. The bottom five of the top ten arranged 15% of IVAs in 2018. That’s more than double their 6% share two years previously. In the same period, the top five firms managed to take just 5% more of the market – but that does still leave them accounting for a whopping 70% of all IVAs.

Creditfix – the biggest loser?

The big boys still dominate. But there is change here too. Creditfix, the biggest player by far, has been unable to capitalise on the rise in IVA numbers and have seen their market share plummet Their raw numbers have risen from 23,355 in 2016 to 24,024 at the end of last year. But, against market growth, their share has gone from just under half (47%) in 2016 to just over a third (34%) now.

Aperture Debt Solutions is the biggest winner. Their percentage share has more than doubled over this period, to nearly 15%. The rise in IVA numbers means Aperture’s IVA business has tripled since 2016. It’s thought this rise dates, roughly, from the time when Aperture purchased ClearDebt and began to refocus its business from free debt advice referrals to the more commercial sources used by its acquisition.

Room for growth

TIP thinks there is still plenty of room for the IVA market to grow.  This needs to be underpinned by referrals from free-to-client advisors that remove the risk of miss-selling. Insolvency practitioners themselves can play a role.  They should focus marketing activity on people in debt with average incomes or above. This area of the market is in need but will always be under-advised by free-sector agencies who, rightly, concentrate on helping the poorest and most vulnerable.

We hope that, in a years time, we will be writing about a sector that continues to grow., and where more IVA firms take a slice. And where trust between the insolvency profession and the debt advice sector has grown.

Look out for news about TIP’s own insolvency practitioner panel soon.

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PennySmart*, the Chester-based money, debt and benefits advice organisation, is partnering with TIP (The Insolvency