Many Financial Planners have reacted negatively to the move by the CII this week to take over the PFS board, with several saying they may re-evaluate their membership.
The Personal Finance Society (PFS) voiced its "shock" on Wednesday at a decision by parent body the CII’s to take over the PFS board by appointing three new CII directors.
One poll hosted on Twitter yesterday by Chartered Financial Planner and former PFS president Garry Hale found that 79% of Financial Planners were considering the future of their PFS membership.
Alasdair Walker, Chartered Financial Planner at Handford Aitkenhead & Walker and founder of the new ‘Our PFS’ campaign designed to fight the CII’s takeover, suggested that the CII’s attempted takeover of the PFS was “all about money.”
He said the board takeover was an attempt by the CII to grab the PFS’s, “£19 million of surplus revenue, which was paid by, and belongs to, the PFS membership.”
Vanessa Barnes, Chartered Financial Planner at Hannay Wealth and member of the PFS Board, posted on Linkedin yesterday: “Following a recent media statement by the CEO of the CII and correspondence between the CII and the PFS, I am confident that my fellow member directors on the PFS board and I will refute all of the allegations of governance failings at the PFS during our tenure, and I am sure that the PFS will in the very near future respond to each and every one of them in full, directly.
“The need to do this is in the face of an onslaught of a legal notice, assertions and public allegations from the CII. The CII and its legal and communications advisers have clearly spent weeks planning its moves against the PFS – recruiting and then appointing additional board members; sending formal letters; briefing the media and CII employees and even using the PFS email account to contact PFS members with its version of events. Even today it has continued to roll out a planned communications strategy with its version of events despite the very vocal concern and antipathy to its unilateral action by PFS members.
“I have noted the comments of my fellow members that to do this on the eve of the Christmas holidays is cynical and designed to disadvantage the PFS and its members.
“I know that my fellow member directors are committed to the PFS and many will be working over the Christmas period to ensure that when the PFS board meets it can plan its response to the CII; share the facts with PFS members and arrange for PFS members to be consulted in an informed way on the advantages and disadvantages of what the CII is intending to do.
“I understand that unless the PFS board is able to meet very quickly it may be impossible, within the timetable forced on it by the CII, to arrange the extraordinary general meeting (EGM) that I and other member directors have seen PFS members demanding.”
Former PFS President Sarah Lord supported Ms Barnes’ comments and added that as the immediate past President she “strongly” refutes the allegations made by the CII, and that the PFS members need to be given the opportunity to share their views via an Emergency General Meeting.
Others to support Ms Barnes’ statement include Chartered Financial Planner and managing director at Blythe Financial, Alan Blythe, who said he was “outraged by the actions of the CII, whom I believe “doth protest too much” about the allegations of attempts to sequester PFS funds, paid for by PFS members.”
He continued: “In my interactions with CII members in the past, there is a clear snobbery that exists and they consider our profession as a mere upstart, barely worthy of their patronage. Indeed, I don’t believe that they even consider our activities to be a profession.
“Yet, their own, highfalutin professional body is on the verge of insolvency, and would have been insolvent years ago, if it wasn’t for the financial support of the PFS. In my opinion, the PFS should either seek to align itself with another Chartered Body or seek its own Chartered Status.”
Chris Shadforth, communications director at the CII, denied that the move to takeover the PFS board was about money.
He said: “The decision of the CII Group Board to appoint additional directors to PFS Ltd will not result in cash being moved from PFS Ltd to any other company within the Institute’s Group of companies in any way different from now. Money already flows between the companies in order to pay for the services PFS members receive from the Group.”
The PFS said that the President and CEO of the PFS were not notified about the appointments until the morning of the announcement and shared its dismay at how members were informed via a membership email which the PFS President and CEO were not shown before it was issued.
The PFS criticised the CII for not inviting a representative from the PFS to join the morning briefing hosted by the CII, which only came to the PFS’ President and CEO’s attention following press coverage of the event.
The PFS is a subsidiary of the CII, and its articles of association give the CII the right to appoint directors to the PFS board. The two organisations have been at loggerheads for some time over the structure and direction of the PFS. The CII last year axed the role of PFS CEO held by Keith Richards.
The PFS board is currently made up of five PFS member director and two institute directors, with the CII appointing three further institute directors which it said will, “equalise the PFS board with immediate effect.”
The CII said it intervened at the PFS due to concern over governance issues. CII CEO Alan Vallance said that the PFS had set up new committees without CII approval and also held meetings without informing CII directors who were entitled to attend.
Mediation has been taking place between the two organisations over the past few months but was ended recently by the PFS, according to the CII.
• A group of PFS members has launched a campaign called 'Our PFS' to fight the CII's full takeover of the PFS board. The website is here: https://ourpfs.co.uk/