PFS president steps down amid surging tensions

She fully refutes all allegations of governance failings by the PFS

PFS president steps down amid surging tensions

Insurance News

By Mia Wallace

Only hours after a subset of the board of the Personal Finance Society (PFS) issued a statement regarding the recent action taken by the Chartered Insurance Institute (CII) board to “equalise” the PFS board, Caroline Stuart, president of the PFS, has tendered her resignation.

In a statement seen by Insurance Business, Stuart revealed that she will be stepping down as both president and member director of the PFS board with immediate effect. Registering her “deepest sadness” at the decision, she highlighted that she has been working with the PFS on a voluntary basis for almost eight years and that it was the greatest honour of her professional life to elected president in September 2022.

“Since March 2021, it has been well documented 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,” she said. “This pressure and stress has increased exponentially since the CII appointed further Institute Directors to the PFS Board on December 21, 2022, with the intention to appoint a majority after a 30 day consultation period. All done under the guise of alleged ‘governance failings’.”

Stuart stated that she and her fellow member directors “fully refute” all allegations made by the CII and said that over the course of her time with the PFS, she and her fellow member directors had performed their fiduciary responsibilities with diligence, professionalism and integrity. She alleged that the CII’s accusations are baseless and condemned them as “a clear attempt to justify accessing PFS funds to support a failing CII.”

She added that she has spent over 440 hours over the last 12 months volunteering on a pro bono basis across a range of PFS-related activities and that this has been to the detriment of her own business and family life. Stuart also asserted that the pressure currently facing the PFS board has been to the detriment of her health – and as a result, she has decided to step down.

Stuart that the CII has created challenging circumstances for members of the PFS board for almost two years now, Stuart alleged that these: “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.”

Stuart also alleged that while the PFS has gone from strength to strength in recent years, she believes the CII is “running out of money”.

“Since RDR, the financial planning profession has grown, evolved and seen a significant raising of professional standards,” she said. “The PFS has been a key driver of this… In my view, the same cannot be said of the CII. As the delivery of insurance products to consumers has evolved and innovated over the last ten years, the CII [has] arguably failed to keep up with these changes. 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.”

She cited declining membership numbers, a “dated” exam and learning proposition, a lack of investment in exam delivery as key drivers of the CII’s alleged financial difficulties – coupled with a supposed massive overspend on failed transformation and IT projects.

“However,” Stuart said, “rather than being transparent about the causes for the financial situation, they have sought to lay the blame on the PFS through the allegation that the PFS has underpaid their share of group costs, a myth that was clearly dispelled when in 2022 the then PFS Board appointed a well respected accountancy firm to undertake a thorough and independent review of the recharge and services provided.

“Despite what I believe to be the very worrying state of the CII finances, they have professed that the action they have taken is ‘not about money’. However, it is crucial for members to be aware that based on legal advice received , claiming that there have been “governance failings”, is the only way in which the CII could justify to members the addition of further Institute Directors to the PFS Board to create a majority.”

Strongly refuting the allegations made by the CII in respect of governance failings, she said she believes these allegations are “blatantly the only avenue remaining for the CII to access the funds I believe they need to prevent the organisation completely failing.”

“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,” she said. “Furthermore, I am disgusted with the way the CII has behaved towards the PFS, the PFS members, and the PFS Board.

“I believe they have attempted to gain access to the PFS reserves through bullying and intimidation of the PFS Board, and when the member directors stood firm and these tactics failed, through the only option remaining to them – in my opinion, a cynical, disingenuous and autocratic takeover of the PFS Board using unfounded and spurious allegations as the reason.”

Stuart said that while it has been an honour to represent members on the board, she will no longer be looking to further the paraplanning and financial planning profession by volunteering with the PFS – and will look to do so in alternative ways. She said she will continue to give her support for the PFS in any way she can and encourages other PFS members to do the same.

However, she said, as these actions will all members, she calls on every member of the PFS and the CII to scrutinise the position of the CII so they can “hold the leadership team of the CII to account for what is in my view is a list of major failings:

  • The state of the CII finances and the potentially reckless squander of millions of pounds under the leadership team’s stewardship over the last six years
  • The poor quality of the services provided to members, including exam and CPD provision, SPSs, renewal of membership fees, all underpinned by an arcane and failing CRM system
  • The complete lack of any corroborating evidence to support their allegations,
  • What I believe to be the misinformation and misdirection from the CII to draw any and all attention away from their own potential governance failings.”

Stuart went on to state her belief that the CII is hoping to: “access and move some or all of the PFS reserves to the CII and are relying on member ‘apathy’ and disinterest to enable them do this.”

She finished her statement with the following entreaty: “I therefore implore all members of the PFS, to take whatever action you can to help prevent the wholesale strip-mining of the PFS and its reserves, by and for the benefit of propping up what I believe is a badly run, financially exhausted CII. Demand an EGM, use your voice and protect your PFS and its reserves from being consumed by the CII forever.”

This feature will be updated later with any statement from the CII.

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