PFS and CII reach ‘agreement in principle’ following clash

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PFS and CII reach ‘agreement in principle’ following clash

The Personal Finance Society and Chartered Insurance Institute have reached an agreement in principle on a range of matters, following constructive discussions.

In a joint statement from them both, the PFS and CII said there has been on-going dialogue and disagreements recently between the two bodies.

However, both parties now agree they have reached a point where they can collaboratively move past these. 

The progress has been aided by the appointment of new CEOs at both the PFS and CII.

In April, the CII appointed Alan Vallance as its new chief executive, while in August, the PFS appointed Don MacIntyre as its interim chief executive. 

The collective aim is to be able to update CII and PFS members on the recommendations of both organisations’ leadership in the new year. 

The PFS and the CII leadership believe this agreement in principle will enable a “positive forward-looking approach” to serving all of their members.  

The finer points of the terms are still being discussed and are therefore on-going and confidential.  

Both bodies will not provide further details beyond this statement at this stage. 

Financial accounts

This comes as last month, the PFS reported that as at December 31, 2021, it had 39,374 members which was down by 138 from 39,512 in 2020.

The members included 3,618 fellows (2020: 3,449), 4,489 associates (2020: 4,273), 21,107 members at diploma level (2020: 20,941) and 3,410 members at certificate level (2020: 3,698).

The PFS also reported a fall in total operating expenses over 2021 due a reduction in central overheads charged by the CII.

In its full-year accounts, the PFS’ operating expenses stood at £4.77mn, down from £5.74mn in 2020.

This was £967,000 lower than the prior year as the company received a reduction in central recharge costs from the CII and this was the main component of cost reduction in the year. 

Central overhead changes compromises of membership services and other overheads.

Membership services includes customer services, membership communication, events, marketing, and operations. 

Earlier this year, the CII said it was "on the road to financial recovery" after it reported an operating surplus before tax of £3.28mn for 2021, compared with a deficit of £4mn in 2020.

In its financial statement in May, the CII said the improvement was largely down to a £2.2mn increase in revenue from qualifications and educational activities over the year.

The institute reported consolidated operating income of £39.06mn in 2021, an increase of £2.11mn on the previous year when it was £36.95mn.

However, it still wrote a post-tax loss of £4.4mn, largely due to tax and a £6.6mn defined benefit pension cost.

Ongoing saga

Over the past year, there has been a lot of back and forth between members and both the CII and PFS.

In February, the CII faced backlash after it told members it had all the funds needed to support its business activities for 2022.

In an email to members dated February 1, interim chief executive officer Jonathan Clark sought to clarify that the CII group had sufficient assets to see it through the year.

This was in response to media reports suggesting the professional body was looking to borrow £5mn from its subsidiary, the Personal Finance Society. 

Clark wrote: “Many of you will be aware of the unnecessary speculation in the press recently, which I want to address and put into perspective.

"I can assure you that CII Group assets are well able to support our business activities for 2022."

Around the same time, members of the PFS called for the chief executive role to remain and wanted the professional body to work better with the CII.

The CII published the findings to its 'shaping the future together' consultation which sought feedback on how the PFS and the CII currently operate, and how the personal finance and insurance professions can work together to raise standards and secure public trust.

Feedback from members revealed a preference for the PFS to remain part of the CII group, but with greater collaboration between the boards and a "new leader empowered to raise public trust in the profession".

There was consensus on the need for a leader of the PFS who could achieve effective engagement with the government, regulators and media.

sonia.rach@ft.com

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