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<p>The government consulted extensively on its reforms to the consumer credit market
prior to the transfer of regulation from the Office of Fair Trading to the Financial
Conduct Authority (FCA) in April 2014. The result of that consultation included the
exclusion for insolvency practitioners when acting in reasonable contemplation of
being appointed as an insolvency practitioner (IP).</p><p> </p><p>It remains the government’s
view that when an insolvency practitioner is no longer acting in reasonable contemplation
of being appointed as an IP, they must be authorised by the FCA if they wish to continue
providing debt advice. There are no immediate plans to review this exclusion. However,
the government does maintain an interest in the impact of regulation on the debt advice
market.</p><p> </p><p>The FCA is thoroughly assessing every debt management firm’s
fitness to trade as part of the authorisation process. The size of the debt advice
market will not be known until this process is complete. The government will stay
in contact with the FCA throughout the authorisation process to monitor the impact
on customer journeys and capacity.</p><p> </p><p>For IPs concerned about the potential
burden of FCA authorisation, the FCA has been clear that it takes a proportionate
approach to setting fees. This includes imposing tiered fees based on the income a
firm generates from its credit activities, ensuring that the smallest firms pay the
lowest fees. There also remain other options for smaller firms to consider, including
the appointed representative regime.</p><p> </p>
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