The line between introducer vs regulated advice insolvency work is drawn by what you actually say to the director, not by your job title. An introducer can describe options, explain a process, and point someone towards a regulated insolvency practitioner (IP) or solicitor. The moment you tell a director which option is right for their company, or what to do next, you have crossed into regulated advice — and introducers are not authorised to give it.
This distinction matters for firms on both sides of a referral relationship. Introducers who overstep expose themselves to regulatory and reputational risk. Insolvency practitioners who accept work from an introducer who has already "advised" the director risk building a case on tainted foundations. Getting the boundary right protects everyone, including the director.
What an introducer legitimately does
A lawful introducer's role is narrow and factual. It sits entirely on the informing side of the line, never the deciding side.
- Explains general processes — what a creditors' voluntary liquidation is, what a winding-up petition means, how administration works, in plain terms.
- Signposts regulated routes — makes clear that only a licensed insolvency practitioner or an SRA-regulated solicitor can advise on, or act in, a specific company's situation.
- Gathers basic facts — company name, broad circumstances, urgency — so the referral to a specialist is well matched, not to form the basis of a recommendation.
- Makes the introduction — connects the director to a regulated firm and steps back once that conversation begins.
None of this requires the introducer to be regulated, provided the introducer stays factual and never tells the director what they personally should do.
Where signposting becomes advice
Signposting turns into advice the moment general information becomes a personal recommendation. The test is simple: would a reasonable director walk away believing they had been told what course of action suits their company?
- "Liquidation is usually cheaper than administration" is general information.
- "You should liquidate rather than go into administration" is advice — a judgement applied to that director's specific circumstances.
- "HMRC petitions are common when VAT arrears build up" is general information.
- "Given your arrears, I'd apply for a moratorium" is advice, and only a regulated adviser can properly weigh that recommendation.
Comparing named options against each other for a specific company, estimating outcomes ("you'd likely keep the business trading"), or reassuring a director that a particular route will work for them all sit on the advice side, regardless of how the introducer phrases it.
Risks of an introducer overstepping
An introducer who strays into regulated territory creates problems that outlast the individual conversation.
- Unauthorised activity. Giving insolvency or legal advice without authorisation can expose the introducer to regulatory scrutiny and, in some circumstances, personal liability if the director relies on flawed guidance.
- Void or unenforceable referral fees. Fee arrangements built on advice rather than introduction can fall outside what a regulated firm is permitted to pay, jeopardising the commercial relationship.
- Compromised director decisions. A director who has effectively already decided, based on an unregulated conversation, may not engage properly with the IP's own independent assessment.
- Reputational damage. Regulated firms are cautious about accepting referrals from introducers with a pattern of overstepping — it puts their own compliance position at risk too.
How IPs protect themselves from tainted intros
Insolvency practitioners and solicitors who accept introduced work have their own steps to take before relying on anything said before the referral.
- Start the assessment fresh. Treat the introducer's summary as context only, and form an independent view based on the company's actual position.
- Ask what was said. A short conversation with the director about what the introducer told them helps identify whether expectations need resetting.
- Use a written introducer agreement. A clear introducer agreement for insolvency firms sets out exactly what the introducer may and may not say, and keeps referral fee arrangements on a compliant footing.
- Check referral fee structures. Confirming that fees are genuinely for introduction, not disguised advice payments, matters for both sides — see the position on referral fees in the UK before any arrangement goes live.
Scripts and boundaries that keep it clean
The safest introducer conversations are built around a small set of phrases, repeated consistently rather than improvised case by case.
- "I can explain how this process generally works, but I can't tell you what's right for your company."
- "That's a question for the insolvency practitioner — they'll look at your specific numbers."
- "I'm not authorised to give advice, but I can introduce you to someone who is."
- "Every company's position is different, so I'd rather you hear the options directly from a regulated specialist."
A useful internal rule: if a director asks "what would you do?", the answer is always a version of "that's exactly the question to put to the specialist." Firms building this into training materials often find it helpful to map the trigger points against guidance on when to refer a client to an insolvency practitioner, so referral timing and language stay consistent across the team.
Frequently asked questions
Can an introducer discuss "options" with a director?
Yes, in general terms — explaining that liquidation, administration or a company voluntary arrangement exist and broadly what each involves. The line is crossed if the introducer weighs those options against each other for that director's specific company.
Does charging a referral fee make someone an adviser?
No. A referral fee paid for a genuine introduction is a separate question from whether advice was given. What matters is the content of the conversation, not whether a fee changed hands, provided the fee arrangement itself is properly structured and disclosed.
Is a disclaimer enough to protect an introducer?
A disclaimer helps set expectations but does not undo advice that was actually given. If the substance of the conversation amounted to a recommendation, a disclaimer at the end will not change that.
Who regulates insolvency practitioners and solicitors in this context?
Insolvency practitioners must be authorised under the framework set out in the Insolvency Act 1986, with authorisation overseen via the Insolvency Service's insolvency practitioner authorisation guidance. Solicitors advising on related legal matters are regulated separately by the SRA.
What happens if an introducer gets it wrong?
The consequences depend on what was said and the harm caused, and can range from a damaged referral relationship to regulatory or legal exposure. This is exactly why firms build clear scripts and written introducer agreements rather than leaving each conversation to individual judgement.
This article is general information for firms and referrers, not legal or regulatory advice, and should not be relied on as a substitute for advice from a regulated specialist about a particular arrangement.
If you're building or reviewing an introducer relationship and want the arrangement checked against how a regulated specialist actually works, Harbourfirst can introduce you to a regulated insolvency practitioner or solicitor to talk it through.