Your IndustryJun 22 2021

Adviser 'delight' at vote against PFS deregistration

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Adviser 'delight' at vote against PFS deregistration

Advisers have taken a sigh of relief after the Personal Finance Society board voted against the Chartered Insurance Institute's latest proposal to deregister the `adviser body.  

Last week at the board’s annual general meeting, the PFS board voted down the decision to deregister as an independent entity. 

Felix J Milton, chartered financial planner at Philip J Milton & Company, said: “I think it’s a good sign that the PFS board has rejected the CII’s initial decision, though the CII is fundamentally the parent body with more members so I won’t hold my breath yet that the PFS is in the clear as a separate entity. 

“Hopefully however this has shown a very strong ‘no’ to the CII and that the PFS deserves to be separate.”

The CII had first proposed deregistering the PFS as a legal entity in 2016 and then again in 2019 with a view to making cost savings and reducing the tax bill.

Both times the proposals were rejected by the PFS board but Sian Fisher, chief executive of the CII told FTAdviser earlier this month that in 2019, it was agreed that it would be considered again following the formation and establishment of the structure of the CII’s Insurance Societies. 

Ricky Chan, chartered financial planner at IFS Wealth and Pensions and a fellow of the PFS, also welcomed the board’s decision, stating he expects the PFS to continue to progress the profession, improve standards of advisers and public perception and ensure good ethics are embedded within the profession.

However, he said: “I’ve no doubt that the CII’s proposal would have soured the relationship with PFS executives and members so it will be a rocky road ahead to mend the relationship. 

“I also think that the PFS board’s decision to reject the proposal is in agreement with a large majority of PFS members, so I think it’s good for PFS to retain its independence.”

He added: “As this has been the third attempt, I have no doubt that this proposal would come up again in future. I think another attempt would further isolate the PFS and CII.”

This decision by the PFS board comes as earlier this month, Robin Melley, chartered financial planner at Matrix Capital Limited urged others in the industry to pressure the CII over its plans to deregister after he wrote to the CII’s independent chairwoman Helen Phillips, telling her that both himself and his fellow IISMW council members had concerns about what was happening at the body.

At the time, other advisers also hit back, saying the move could see some members switch to rival professional body the Chartered Institute for Securities & Investment should it go ahead.

Responding to the PFS board’s latest vote, Melley said he and the rest of the PFS members were “delighted” at the rejection.

He said: “I would like to think that the CII now take the opportunity to engage with the PFS members and come to understand that financial planning is a completely separate profession to general insurance; and that what the members and the public we serve need and want is a dedicated and independent professional body for the personal finance sector. 

“The obvious next step for the CII to take is to maintain the conditions for the continued growth and evolution of the PFS as a separate and independent professional body.”

Commenting on the departure of PFS chief executive Keith Richards who is set to leave at the end of the month, Melley said his exit was a “a major set back”, particularly at the moment when he is “at his most influential in the development of the financial planning and advice profession”.

CII's Fisher said: “When we launched the Strategic Manifesto in 2016, we set out our vision – 'Working together as one united profession we will drive confidence in the power of professional standards'. 

“Integral to this was working as an efficient, united group with a clear direction of travel and a clear set of common goals. It was against this backdrop that the topic of deregistration was tabled – as a way of focusing on unifying CII governance and the overall efficient running of the organisation.”

She added: “Nothing that was being considered would in any way have compromised the benefits members receive from the PFS, nor its health, status and efficient functioning. 

“We recognise and regret, however, that the CII’s intentions have not been well communicated. The CII recognises the PFS board is not supportive of deregistration at this time.”

sonia.rach@ft.com

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