Personal Finance Society (PFS) president Caroline Stuart has resigned in the wake of the Chartered Insurance Institute (CII) appointing three institute directors to the PFS board last month.
Stuart has been working with the PFS for close to eight years.
In a statement on 5 January 2023, as seen by International Adviser, she said: “The untold pressure that the PFS board is currently under is now also at the detriment of my health and I have taken the very difficult, but I feel only, decision available to me to preserve my own health, and have resigned my position as president and member director of the Personal Finance Society, with immediate effect.”
Stuart added that the PFS board has been “under tremendous stress and pressure from the CII from threats such as de-registering the PFS and flooding the PFS board with institute directors”.
“This pressure and stress has increased exponentially since the CII appointed further institute directors to the PFS board on 21 December 2022 with the intention to appoint a majority after a 30-day consultation period. All done under the guise of alleged ‘governance failings’,” she added.
“I, along with my fellow member directors, fully refute all allegations made by the CII. In my time as both a member director, vice president and president, my fellow member directors and I have taken our fiduciary responsibilities extremely seriously.
“We have performed them diligently, professionally, carefully and with the utmost integrity. These allegations are baseless and without foundation and, in my opinion, a clear attempt to justify accessing PFS funds to support a failing CII.”
‘Bullying’
The strained relations between the CII and the PFS hit an all time low when the CII appointed three institute directors to the PFS board last month. Currently, the PFS board is made up of five PFS directors and two CII directors.
The institute said the move will “equalise” the board of its subsidiary.
The three newly appointed directors are:
- Sarah Howe, former chief executive of Harpenden Building Society and ex-independent chair of the consumer panel at Openwork;
- Neil Watts, former board member of the Office of the Qualifications and Examinations Regulator (Ofqual) and complaints committee member at the Independent Press Standards Organisation (Ipso); and
- Azlina Bulmer, former director of international at the Royal Institute of British Architects, current associate non-executive director at Harrogate and District NHS Foundation Trust and existing CII membership and engagement director.
The PFS said in December that it was completely blindsided by the move and was only made aware of the appointments minutes before the membership and the wider profession on the morning of the announcement.
Stuart added: “The member directors of PFS board have for nearly two years been operating in the most challenging of circumstances, which at times has been to the detriment to our own professional and personal lives.
“These circumstances, created by the CII, include numerous instances, in my opinion, of unprofessional and hostile behaviour of CII appointed persons, coupled with a failure of institute directors to attend PFS board meetings, threats to make PFS board meetings inquorate, ‘flood’ the PFS board with institute directors, and to ‘de-register’ the PFS. It is well documented that the CII has made numerous requests to the PFS for funds.
“Despite negotiating in good faith with the CII, the PFS board has since been party to numerous threats from the CII to flood the PFS board, coupled with, in my view, bullying and intimidation tactics in what I believe is an attempt by the CII to access the PFS’ reserves, all culminating in the unilateral and, in my view, autocratic actions taken by the CII on 21 December 2022.
“I firmly believe the reasons for this behaviour from the CII is because, as can be seen in their published accounts, the CII is running out of money. Their latest set of published accounts demonstrate that their overall financial position has been deteriorating year-on-year.
“The PFS has gone from strength to strength over recent years. Since Retail Distribution Review (RDR), the financial planning profession has grown, evolved and seen a significant raising of professional standards. It is my view that a disastrous combination of arrogance, complacency and misguided business priorities by the leadership of the CII has potentially led to a catastrophic failing of the CII.”
‘Disgusted’
Stuart added: “As a member of the PFS and the PFS board, I cannot support the actions taken by the CII and by implying they are forming the majority without consultation, they have treated members with utter contempt. Furthermore, I am disgusted with the way the CII has behaved towards the PFS, the PFS members, and the PFS board.
“My professional life has always been driven by my high values of honesty, transparency and integrity. This has been demonstrated in my continual and constant commitment to the PFS for the last almost eight years.
“It has been an honour to represent members on the board and I will continue to work to further the paraplanning and financial planning profession in any way I can, but sadly, this will no longer be through volunteering with the PFS when the CII’s values are clearly so vastly far removed from my own.
“However, I will continue to give my support for the PFS in any way I can and I would also encourage all PFS members to do the same.”
Seek members help
At the same time of Stuart’s resignation, the member directors and co-opted advisers of the PFS board also issued a statement expressing their “severe disappointment with the announcements made by the CII” in December 2022.
The PFS board said in a statement seen by IA: “In particular, we note that the comments made about governance failures and other failings by the PFS board are not true, and not supported by any documentary evidence.
“We remain committed to making a success of a member-led professional body working in the interests of its members. The CII actions and false statements have made that much more difficult.
“In our view, giving members a say is the right way forward, and we do not support the actions of the CII board to subvert the PFS constitution, and seek to outnumber the democratically elected board.”
They added that its next steps should be
- A survey to be issued to all members to enable the views of PFS membership to be gathered on the way forward;
- A programme of webinars over the next couple of weeks to hear as many views as possible; and
- The calling of an extraordinary general meeting in accordance with the articles of association in the next two weeks.
“We will work to deliver this and urge all members to get involved and provide their feedback and view on their PFS before the end of the consultation period on 19 January 2023,” the board added.
Response
Helen Phillips, CII group chair, said in a statement to IA: “It is with sadness that we have heard of Caroline Stuart’s decision to resign as president of the PFS board. Undoubtedly, Ms Stuart’s role has been particularly challenging over the last few weeks and I wish her a swift recovery.
“Sadly, we must reiterate that the PFS Board governance failures – which are recorded on our website – are not, as claimed, baseless or without foundation, and suggestions that the CII Group Board has appointed further institute directors for any other reason is deeply misleading.
“The CII Group has weathered the financial storm created by the pandemic, while investing in its IT systems and buying out the group pension fund by deliberately utilising the group’s central reserves and leaving the PFS and other company reserves untouched. This is good business practice and was discussed in detail at the organisation’s recent AGM, along with the need to establish a new recharge model that fairly reflects the costs of delivering PFS member services, which is recognised by both Alan Vallance, CII Group chief executive, and Don MacIntyre, interim PFS chief executive. There has been no change in that position since the AGM.
“The decision to appoint further institute directors to the PFS board was not an outcome the CII Group board wanted or pursued, particularly during the festive holidays. However, after significant governance failings were repeatedly raised with the PFS, the CII Group board was sadly left with no choice but to address these failings and take this action after its December Board meeting. Not only was this in the best interests of all PFS and CII members, it is also consistent with the general duties conferred in law on all company directors, as well as in the PFS articles of association.
“The new institute directors all bring immense professionalism and exceptional experience to the PFS board, and are mandated to focus entirely on protecting and serving PFS interests, as well as establishing the long-term governance arrangements that will create a sound foundation for the future of the PFS.
“The CII Group board recognises that PFS members have important questions about the appointment of further institute directors, and we will ensure further opportunities are provided for them to be asked and answered over the consultation period. It is essential that PFS members are now consulted, and CII staff are already supporting this exercise as part of their normal, professional service to the PFS Board and members.
“The CII Group board remains deeply committed to its PFS members and – for the avoidance of doubt – there is no plan whatsoever to deregister the PFS. The CII Group board sees no merit in such a move and wants to see the PFS flourish as a professional membership body. Nor will there be any change to any of the services received by PFS members. The CII Group will continue to deliver, as normal, all PFS qualifications, exams, certificates, training, events, and the statements of professional standing, as well as all operational functions, including marketing, HR and IT.
“The PFS and CII are essential voices for the UK public in these challenging economic times and now more than ever, all our time, energy and resources should be fully invested in building a stronger future, and delivering exceptional services, for our PFS and CII members.”
