Leading industry figure Ken Davy has warned the CII that it is in danger of bringing the Financial Planning profession into “disrepute” over its handling of its row with the Personal Finance Society.

Mr Davy said he believes an independent or breakaway PFS is possible if a solution to the dispute cannot be found soon.

Mr Davy is an honorary fellow of the CII, and a past President of the Life Insurance Association, one of the bodies which provided the foundation for the PFS. He is also the founder of industry providers SimplyBiz, Fintel and DBS.

He says he has watched developments with “increasing sadness."

The Personal Finance Society (PFS), the body for Chartered Financial Planners, has been at loggerheads with parent body the Chartered Insurance Institute over the direction of the PFS and the use of PFS funds.

The PFS was formed after two earlier adviser bodies, the Society of Financial Advisers (SOFA) and the Life Insurance Association (LIA), merged and then joined the CII. It is a semi-autonomous body but nearly all staff and admin are provided by the CII.

Mr Davy said: “Whatever the future holds, it is crystal clear that the actions of the CII in seeking to dominate and control the PFS, are bringing themselves and the sector into disrepute.

"For the PFS the question is do they have the courage and determination to plough their own furrow for the benefit of today's and tomorrow's financial professionals? 

“For those of us watching from the sidelines, we must all hope that a satisfactory solution can be found before too long.”

Mr Davy said he had watched developments, “with increasing sadness, frustration, and a degree of anger” at the long running dispute between the CII and the PFS.

He said: “Speaking from an entirely personal perspective, it seems to me that the CII is envious of the professionalism and financial success of the PFS, as the core of the dispute seems to be the CII's misplaced desire to dominate the PFS.”

He said when the merger of the LIA and the CII took place in 2005, the Life Insurance Association brought with it a “dowry” of over 20,000 members, around a million pounds of cash, and a valuable debt free head office in Chorleywood. For its part, the CII brought a route to chartered status.

In comments sent to Financial Planning Today he added: “Time and circumstances, however, have now moved on dramatically and perhaps the time has come for the PFS to become totally independent.

"We can all recognise that the Financial Planning profession has fundamentally changed since 2005, mostly thanks to legislation and regulation, rather than the CII.  As a result, the question to be asked now is what relevance the insurance institute has to the work of today's financial adviser? Precious little is, I believe, the only honest answer. Indeed, I suspect that, if anything, it adds an unnecessary degree of confusion for clients.”

He said the for the leadership of the PFS, of course, is how to bring about the changes it feels are necessary. Options could include “a dignified exit” from the CII to create their own independent professional body or a partnership with another more appropriate chartered professional body.

He warned there was the possibility of a split within the PFS with a significant section breaking away. He said at least 20% of the present membership might support a breakaway group if it linked with a more appropriate and supportive professional body.