The Chartered Insurance Institute (CII) Group has announced it will appoint a majority of directors to the Personal Finance Society (PFS) board, after independent mediation failed.
It has today (21 December) appointed three new institute directors to the PFS board with immediate effect.
After a 30-day consultation period has elapsed, the CII Group board said it intends to form a majority by appointing a further institute director to the PFS board.
CII chair Helen Phillips said: “This is not an outcome the CII Group board wanted or pursued. The CII team has worked hard for many months, initiating independent mediation, and responding to the PFS board’s demands diligently, professionally and with immense goodwill.
“Therefore, it is deeply disappointing that independent mediation has failed, and serious and significant governance failures have arisen, which leave the CII Group board with no alternative but to take this action at this juncture and resolve matters without further delay.”
The PFS is a subsidiary of the CII Group, and its articles of association give the CII board the right to equalise or appoint a majority of directors to the PFS board.
The PFS board is currently made up of five PFS member directors and two institute directors.
Today the CII is announcing the appointment of three further institute directors, who together will equalise the PFS board with immediate effect.
They are:
- Sarah Howe – former chief executive of Harpenden Building Society, former independentchair of the consumer panel at Openwork, and recently appointed to St Clare Hospice board.
- Neil Watts – former board member of the Office of the Qualifications and Examinations Regulator (Ofqual), former board member of the Architects’ Registration Board (ARB) and former advisory board member for Cifas, as well as former complaints committee member at the Independent Press Standards Organisation (IPSO)
- Azlina Bulmer – former director of international at the Royal Institute of British Architects (RIBA), current associate non-executive director at Harrogate and District NHS Foundation Trust, and existing CII membership and engagement director.
CII CEO Alan Vallance said the three new appointees all bring “immense professionalism and exceptional experience” to the PFS board.
“The newly composed board will continue to be mandated to focus entirely on protecting and serving PFS interests,” he added.
“The CII team will work with the new PFS board to embed best practice and establish the long-term governance arrangements that will ensure PFS members receive all the services and support they deserve without any further delay.”
Cover story: Can the CII find calmer waters?
Phillips added: “The CII Group board remains deeply committed to its PFS members. The PFS is a critical part of what we do and an essential voice for advice.
“Now more than ever, it is important that all our time, energy and resources are fully invested in building a stronger future, and delivering exceptional services, for our PFS and CII members.”
The CII insisted there is no change to any of the services received by PFS members. It said it will continue to “provide and maintain all PFS member services”.
“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,” it added, in a statement.
There have been media reports of the CII attempting to de-register the PFS, allegedly to get hold of the latter’s funds.
The same reports assume this move led to the resignation of Keith Richards, the last permanent chief executive of the PFS.
A source close to the PFS told Money Marketing for a recent cover feature: “We know that Keith Richards made clear his position regarding de-registration and the future of the PFS following two failed attempts by the CII.
“They clearly chose to test him with a third attempt in 2021, deliberately leaving the PFS without a prominent leader.
“In fact, the CII chose to retire the role of PFS CEO to gain control and replace it with a CII chief membership officer, presumably banking on the fact they would get de-registration through much easier.”
To date, this information has not been confirmed by Richards, while the role of CEO of the PFS has been reinstated. Don MacIntyre was appointed as interim CEO on 16 August, as previously announced.
As the PFS expressed its intention to reinstate the role of CEO, Richards welcomed the news.
He said: “I believe the personal finance sector evolved into a recognised profession post-Retail Distribution Review.
“And the PFS played a key role as its dedicated and independent professional body, which would not have been achieved without a dedicated board and executive leadership.
“I am therefore delighted that the membership have overwhelmingly voiced their views and forced the reversal of a poor decision.”
After 18 years of collaboration, the CII launched a consultation on its relationship with the PFS, among others. It published its findings in February 2022.
While some CII members favoured the PFS having greater autonomy, the majority wanted it to stay within the group.
The feedback summary in the consultation stated that personal finance participants identified advantages to maintaining the status quo. That included economies of scale provided by a shared operational infrastructure and access to CII exams.
I’m surprised it has taken this long. If someone had the energy & enthusiasm it would be a good time to start an association independent from the CII. I hope those people who voted to gift the LIA to the CII are at last regretting their actions.
Very sad news for PFS members. And sorry to see the CII CEO get off to such a poor start, with massive price hikes in PFS qualifications, a major data breach and IT delays, all in the space of his first few months !
Time for a rethink perhaps ?
We need a body that can lobby effectively on our behalf and deliver qualifications that don’t cost an arm and a leg.
Yet again the CII shows its autocratic nature. They seem to have forgotten that the PFS was formed precisely because the CII just didn’t have the culture to gel with the adviser community. Tony Gordon is right. The LIA was in fact raped.
There is in fact a viable alternative – The CISI which has the CFP under its wing. (Both internationally recognised qualifications unlike the PFS) Chartered status can be awarded via the CISI. Time to kick the CII into touch at long last.