It is not in the interests of members of the Personal Finance Society for the Chartered Insurance Institute to fail, the immediate past president of the PFS has warned.
Speaking on the FTAdviser Podcast, Sarah Lord said the structure of the organisations meant the failure of the CII would have wide-ranging effects on the financial planning profession but she called on PFS members to make their voices heard during the ongoing consultation.
Last month, the CII announced it was to appoint a majority of directors to the PFS board, alleging failed mediation attempts and poor governance issues. This was dubbed a "hostile takeover" and led to outcry from PFS members and the PFS president, among others, resigning.
Lord said: "The CII is a provider of statements of professional standing for about 25,000 PFS members and the majority of those members whos SPSs are provided by the CII are dependent on them to be able to trade which ultimately has an impact on their livelihoods. The CII is also the chartered body. The PFS is not the chartered body. I'm a chartered financial planner and I have great pride in the fact I have achieved being a chartered financial planner and I would like to continue to be able to use that designation.
"One of the key aspects is that the action and the notice given [of appointing a majority of directors to the PFS board] under the articles of association the PFS board has the ability to consult with members for 30 days which, given the timing and Christmas, timing is particularly tight.
"The consultation period ends next week, next Thursday. There are seven days in which the PFS board can provide feedback from that consultation to the CII for the CII to consider."
She added: "It is important that PFS members that have a view, have a strong view and are passionate about our profession, are speaking out and using their voice in this period of consultation."
Richard Bishop, a financial adviser and academic who appeared on the podcast alongside Lord, said that if PFS members were inclined to, they could "cripple" the organisation by resigning and refusing to serve on the PFS board.
He said: "They can't form a board of directors without six PFS members and two lay members and technically unlimited amounts of CII directors. If all the PFS directors resign and all the members agree not to be appointed as a director that will pretty much cripple the situation because they won't be able to form a board.
"It's a question of how much trouble does the PFS want to make, and I would suggest not too much trouble because [...] if the PFS members cause the CII more issues and the CII then goes into liquidation it will drag the PFS into liquidation as well because it would be reversed: you wouldn't have any CII directors to form a board of the PFS."