IVA take up rate 12% of Debt Consolidation enquiries!

The take up rate for the personal IVA at Lewis Alexander is 12%.

The company specialises in the Personal Debt Management sector and has done so successfully since February 2003. The information released is based upon enquiries that are generated from the initial enquiry to a live conversion into a Lewis Alexander client. The IVA work is outsourced to preselected Insolvency Practitioners.

The remaining 88% splits down into 63% opting for a Lewis Alexander Debt Management Plan and the final remainder choose options such as bankruptcy and loan options where available.

The figure is surprising as the general market place of personal debt advice and help services seems to be direct selling the IVA! Lewis Alexander are proud to offer the client a full explanation where necessary so as to enable the consumer to make an informed decision. This could be adopted as best practice amongst all companies and implemented on a compliance basis by a regulator.

The industry could then adopt an accepted standard conversion rate for a compliant fee charging advisory service.

The main problem Lewis Alexander has encountered with the funding and floatation's of IVA PLC companies, dating back to 2004, is that the individual choosing to enter into an IVA over a Debt Management Plan or Voluntary Petition for Bankruptcy is no different in there make up, they are still only human! The point being is that the individual is open to exactly the same changes in circumstances over the next 5 years that has created the need for action in the first place. The Debt Management Plan may not be as rewarding in fees as an IVA to the operating company but is sometimes a preferred approach for advice when the advisor has the experience the client does not!

Yes, companies are in business to make money but at this end of the financial sector there should be an element of caution as the detriment to the consumer can be catastrophic if the consumers IVA fails due to their lack of continuity of payment etc,,

The Debt Management Plan is not a legally binding agreement and is informal between client and creditor. Therefore, the "City of London" or financial institutions raising funds for floatation's have avoided Debt Management Companies in the main. This is why some of the IVA companies or IVA factories have scurried around making acquisitions that seem still to be proven on a profitability basis. These companies surely could not have floated as Debt Management operations but did create great projections and share rushes, then proceeded to buy Debt Management companies in a bid to keep their bottom line positive and reduce the cost per client acquisitions.

Lewis Alexander has previously rejected take over bids from a certain IVA company due to this mind set as described above. The take over would have affected the success enjoyed by both client and employee when clearing debts, coupled with the excellent balance of impeccable client retention rates with outstanding abilities to generate new enquiries that convert into acquisitions.

The cost to an IVA company to generate an acquisition had reached £1000 over the last 2 years and in some cases more. These companies business models are costly and when compared to the Lewis Alexander CPA of an IVA at £150, it seems outrageous. Is the sector finished as a direct sell arena and where will the money makers move next?

We can confirm that the only PLC involvement at Lewis Alexander is Profitability, Liquidity & Capital.