Advisers and PFS left shocked amid CII takeover

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Advisers and PFS left shocked amid CII takeover
CII chief executive, Alan Vallance

The Chartered Insurance Institute's (CII) decision to appoint a majority of directors to the Personal Finance Society board has been met with widespread shock and contempt, from both past presidents and advisers alike. 

Responding to the announcement, PFS president Caroline Stuart said neither the board or the PFS membership had been given prior notice of the decision and as such it came as “a huge shock”.

FTAdviser understands the PFS will hold an emergency board meeting to respond to the development. 

Under its articles of association, the PFS has thirty days from the action declared by the CII to consult with its members.

“Having not informed our board of its intentions, the CII has acted unilaterally and without PFS leadership or member consent. We will take the right steps available to us to consult PFS members as to their views on if such a move by the CII is in PFS members’ and the PFS’s best interests,” Stuart said.

In a tweet, Elliot Guthrie, financial planner at Create and Prosper, wrote: "Disappointing to see @CIIGroup bully their way onto the PFS board - also worrying that the CII now have control over the PFS finances given their track record with poor management and 'borrowing' from the PFS."

Meanwhile, PFS past president, Garry Hale described the timing of the announcement just before Christmas as a “blatant attempt to avoid scrutiny”.

Hale said he was “shocked, stunned and angered” that the CII chose to take “the harmful and cynical decision to announce its intention to ‘flood’ the PFS board with CII nominee directors”.

“The timing of this on the eve of Christmas celebrations is a blatant attempt to avoid scrutiny, avoid CII/PFS member backlash, avoid journalists’ questions and prevent regulators and politicians from actively understanding or mediating the decision,” Hale said.

He believes the decision was made “in the full knowledge that the majority of the members, sector journalists and regulators will be off work and with their families, in many cases for the first time in three years.”

Hale urged all PFS members to “speak out and raise any concerns they have about this potentially damaging move”.

The PFS is a subsidiary of the CII group, and the PFS’ articles of association give the CII group board the right to equalise and/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.

However, the CII is appointing a further three institute directors; Sarah Howe, Neil Watts and Azlina Bulmer.