Vanessa Barnes former Personal Finance Society board member sent a letter to chair of the PFS board Andy Briscoe yesterday. (30 November)
In the letter Barnes has voiced her concern regarding the Chartered Insurance Institute Group 2022 report alongside the concerns of the ‘impending departure’ of chief executive Alan Vallance, finance director Trevor Edwards and ‘recent’ departures of the CII’s chief operating officer John Bissell, professional standards director Melissa Collett and HR director Caren Thomas.
Within the CII report it states that Vallance announced his resignation from the CII on 26 October 2023 and will remain in post until Spring 2024.
Similarly a spokesperson for the CII told International Adviser that Edwards, who is not part of the executive team, will also remain in post until then.
Bissell retired from his role as COO and CII board member in early April 2023 while Collett left the CII on 25 May 2023.
The report also says that Thomas was in her role as HR director until August 2023.
Barnes goes on to say in her letter that she is aware of open correspondence regarding the PFS reserves.
She said: “In all of the responses there has been a singular failure to address why the CII continues to hold £10,858m of members’ funds rather than transfer it to the PFS bank account holding £10.045m.
“The PFS board is now saturated by CII appointed directors with the declared intent to gain majority control. This is of significant concern to members given the evident conflicts of interest and possibility of insolvency and the continues lack of openness and transparency regarding the true financial position of the Institute.”
Vanessa Barnes and Gordon Wilson resigned as directors from the PFS in June 2023 following the ongoing dispute with the CII.
Both resigned following the PFS’s announcement it would have an independent governance review conducted by Integrity Governance in April this year as tensions continued to heighten between the two organisations.
In her letter Barnes expressed that members would like to understand why the CII’s potential conflicts of interest regarding the PFS financial assets satisfy the objects of the PFS.
As well as understand why the board has significant part of the members’ reserves held ‘in a multitude of different areas’ and ‘with other debtors’ as explained by Don MacIntyre at the PFS AGM.
Barnes posed a series of questions to the entire CII controlled PFS board in the letter.
Which included: “If you have not asked for the entire reserves to be transferred to the PFS account how have you reached a level of confidence that there is no risk to the funds despite the CII financial statement and the imminent departure of the chief executive and finance director?”
She continued: “ Some members are concerned that the real reason for the appointment of a majority of CII employees to the PFS Board was not due to concerns regarding governance but a construct in order to demonstrate to the CII’s bankers that the CII is in control of the PFS member reserves – could you please comment on this point?
“Some members believe that the CII repeatedly misleads the membership of the insurance sector, local institutes and the PFS with narrative around the consolidated group accounts and is careful not to publish a P&L for the institute alone despite repeated calls to do so. However, careful review of the published PFS accounts and the CII financial statement particularly the balance sheet highlights a number of grave concerns.”
Barnes who is a financial planner at Hannay Wealth said in a statement following her resignation from the PFS that the ‘bullying and intimidation’ carried out by the CII board and executives towards the member directors of the PFS board has been ‘shameful’.
She said: “For over a year, I have been asking difficult but necessary questions with regard to costs, in order to fulfil my fiduciary responsibilities. These legitimate and pressing concerns have been ignored and remain unanswered. The failure to properly respect the use of members’ reserves in line with the objectives of the PFS, together with the inadequate safeguarding of the entire PFS members’ reserves, means that I cannot agree to approve the PFS Accounts for 2022.”
In response to the letter, a spokesperson for the CII, said: “The CII Group accounts for 2022 were signed-off by independent auditors on 31 July 2023. The auditor issued an unqualified audit report which includes their conclusion related to going concern that they, ‘have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period of at least twelve months from when they were authorised for issue’.
“The CII Group accounts recorded a net surplus of £2.2m in its financial year 2022, similar to 2021, with total funds rising to £30.6m. The cash and short-term deposits held by the Institute at the end of 2022 (£14.295m) was more than sufficient to cover the (£10.858m) PFS intercompany debt and continues to be so; the Institute maintains a cash balance at all times in excess of the PFS intercompany debt it holds, which is monitored by the PFS Board. The remainder of the PFS reserves are held directly by the PFS.
“The Consolidated and institute statement of financial position table on page 29 of the report indicates that the Institute had net assets (reserves) of £9.550m at the end of December 2022. That is net of all liabilities, including the PFS intercompany debt. This figure is higher than at the end of December 2021 (£9.338m).”
