PFS president's resignation letter in full

With the deepest sadness, I have today (January 5) given my resignation as both President and Member Director of the PFS Board to the PFS Board, I will be standing down with immediate effect.

I have been working with the PFS on an entirely voluntary basis for close to eight years, both as a member and chair of the Paraplanner Panel and, since September 2018, as a Member Director and vice-president of the PFS Board.

It was the greatest honour of my professional life to be elected as President of the PFS in September 2022, particularly as I was the first paraplanner to be elected to the role.

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.

The information provided by the CII when they were seeking the PFS Board to act as guarantor to the loan was in my view woefully lacking and insufficient to make a decision.

This pressure and stress has increased exponentially since the CII appointed further Institute Directors to the PFS Board on the 21st December 2022 with the intention to appoint a majority after a 30 day Consultation Period. All done under the guise of alleged ‘governance failings’.

I, along with my fellow Member Directors fully refute all allegations made by the CII. In my time as both a member director, Vice President and President, my fellow Member Directors and I have taken our fiduciary responsibilities extremely seriously.

We have performed them diligently, professionally, carefully and with the utmost integrity. These allegations are baseless and without foundation and in my opinion, a clear attempt to justify accessing PFS funds to support a failing CII.

Untold pressure

In the past 12 months alone, I have spent over 440 hours volunteering on a pro bono basis with the PFS in my roles on the PFS Board, the PFS Paraplanner Panel and mentoring through the Connect Platform.

The amount of time spent supporting the PFS has often been to the detriment of my own business and family life.

The untold pressure that the PFS Board is currently under is now also at the detriment of my health and I have taken the very difficult, but I feel only, decision available to me to preserve my own health, and have resigned my position as President and Member Director of the Personal Finance Society, with immediate effect.

The Member Directors of PFS Board have for nearly two years been operating in the most challenging of circumstances, which at times has been to the detriment to our own professional and personal lives.

These circumstances, created by the Chartered Insurance Institute, include numerous instances, in my opinion, of unprofessional and hostile behaviour of CII appointed persons.

This is 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.

A disastrous combination of arrogance, complacency and misguided business priorities.Caroline Stuart, former PFS president

It is well documented that the CII has made numerous requests to the PFS for funds. In March 2021, the PFS Board was approached by the then CII CEO with a request firstly to de-register the PFS and secondly for it to act as guarantor to a Credit Facility provided by a leading bank.

The information provided by the CII when they were seeking the PFS Board to act as guarantor to the loan was in my view woefully lacking and insufficient to make a decision.

Despite the PFS Board at that time requesting supporting information to be able to review and consider the proposal in detail, the information provided was either contradictory, inconsistent or incorrect.

Ultimately leading the then PFS Board with no option but to decline the proposal in line with their duties to the PFS.

In response to this, and despite negotiating in good faith with the CII, the PFS Board has since been party to numerous threats from the CII to flood the PFS Board, coupled with, in my view, bullying and intimidation tactics.

This is in what I believe is an attempt by the CII to access the PFS’ reserves, all culminating in the unilateral and in my view, autocratic actions taken by the CII on 21st December 2022.

I firmly believe the reasons for this behaviour from the CII is because, as can be seen in their published accounts, the CII is running out of money. Their latest set of published accounts demonstrate that their overall financial position has been deteriorating year on year.

From strength to strength

The PFS has gone from strength to strength over recent years. Since RDR, the financial planning profession has grown, evolved and seen a significant raising of professional standards.

The PFS has been a key driver of this; PFS member numbers have increased from all sectors of financial planning such as advice, paraplanning and compliance, raising the profile of our profession and increasing the revenues of the PFS and subsequent reserves.

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 have 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.

they have sought to lay the blame on the PFS.Stuart

With declining member numbers, and an exam and learning proposition that is dated and in my opinion not fit for purpose, in addition to a lack of investment in exam delivery methods, leaving them unable to innovate and provide a continued and consistent service during the pandemic, has seen falls in membership and exam revenue.

This coupled with a supposed massive overspend on failed transformation and IT projects has, in my opinion, had a detrimental impact on the finances of the CII, which could not even be resolved with the £21mn sale of Aldermanbury, our heritage building, as again can be seen in the published accounts.

However, 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.

This is 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.

'Not about money'

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.

My fellow member directors and I completely and strongly refute all allegations made by the CII in respect of governance failings and despite numerous requests to provide evidence of these governance failings, to date, none has been forthcoming.

Why is this?

I believe it is because there is none, and these allegations are in my opinion blatantly the only avenue remaining for the CII to access the funds I believe they need to prevent the organisation completely failing.

In addition to which, it is important that all members are aware that all governance services for the PFS are provided by the CII for which the PFS pays an annual fee through the recharge.

I believe it is very coincidental that the so called governance failings at the PFS have only been identified at the point that the CII are, in my view, desperate for money.

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.

Behaviour

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.

My professional life has always been driven by my high values of honesty, transparency and integrity.

This has been demonstrated in my continual and constant commitment to the PFS for the last almost eight years.

It has been an honour to represent members on the Board and I will continue to work to further the paraplanning and financial planning profession in any way I can, but sadly, this will no longer be through volunteering with the PFS when the CII’s values are clearly so vastly far removed from my own.

However, I will continue to give my support for the PFS in any way I can and I would also encourage all PFS members to do the same.

But, as these actions will affect us all, I also call to every member of the PFS and CII to scrutinise the position of the CII yourself so you 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.

I believe the CII are 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.

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."

- Caroline Stuart, outgoing president of the PFS

CII response to the resignation statement

Helen Phillips, CII Group chairperson, has responded to Stuart's resignation, saying:

"It is with sadness that we have heard of Caroline Stuart’s decision to resign as president of the PFS board. Undoubtedly, Ms Stuart’s role has been particularly challenging over the last few weeks and I wish her a swift recovery.

Sadly, we must reiterate that the PFS board governance failures – which are recorded on our website – are not, as claimed, baseless or without foundation, and suggestions that the CII Group Board has appointed further institute directors for any other reason is deeply misleading.

The CII Group board was sadly left with no choice but to address these failings and take this action. Helen Phillips, CII chairperson

The CII Group has weathered the financial storm created by the pandemic, while investing in its IT systems and buying out the group pension fund by deliberately utilising the group’s central reserves and leaving the PFS and other company reserves untouched.

This is good business practice and was discussed in detail at the organisation’s recent AGM, along with the need to establish a new recharge model that fairly reflects the costs of delivering PFS member services, which is recognised by both Alan Vallance, CII Group chief executive, and Don MacIntyre, interim PFS CEO.

There has been no change in that position since the AGM.

The decision to appoint further institute directors to the PFS board was not an outcome the CII Group board wanted or pursued, particularly during the festive holidays.

However, after significant governance failings were repeatedly raised with the PFS, the CII Group board was sadly left with no choice but to address these failings and take this action after its December Board meeting.

Not only was this in the best interests of all PFS and CII members, it is also consistent with the general duties conferred in law on all company directors, as well as in the PFS Articles of Association.

The new institute directors all bring immense professionalism and exceptional experience to the PFS board, and are mandated to focus entirely on protecting and serving PFS interests, as well as establishing the long-term governance arrangements that will create a sound foundation for the future of the PFS. 

The CII Group board recognises that PFS members have important questions about the appointment of further institute directors, and we will ensure further opportunities are provided for them to be asked and answered over the consultation period. 

It is essential that PFS members are now consulted, and CII staff are already supporting this exercise as part of their normal, professional service to the PFS board and members.

The CII Group board remains deeply committed to its PFS members and - for the avoidance of doubt - there is no plan whatsoever to deregister the PFS.

The CII Group board remains deeply committed to its PFS members.Phillips

The CII Group board sees no merit in such a move and wants to see the PFS flourish as a professional membership body. Nor will there be any change to any of the services received by PFS members.

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.

The PFS and CII are essential voices for the UK public in these challenging economic times and now more than ever, all our time, energy and resources should be fully invested in building a stronger future, and delivering exceptional services, for our PFS and CII members.”

Both statements have been published in full.