Advisers weigh up rival PFS body as some mull move to CISI

Four days before Christmas, the CII told PFS members it planned to take control of the society’s board, having accused it of poor governance. 

The PFS hit back in the new year, saying there was no evidence to support the CII's allegations and members of the PFS planning panel, including its chair Alasdair Walker, have since walked away from the society. 

If a body appears with the right backing, then it’s not inheriting a bad computer system, bad working practices, or marred management.Rob Reid, former PFS president

One adviser FTAdviser spoke to said “many” of his peers were making plans to move to the Chartered Institute for Securities & Investment, a separate professional body which advice firms can also secure chartered status from.

Others have reported talk of forming a new alternative to the PFS.

“I would like to see the PFS preserved, but it seems that may not be possible due to the actions of the CII,” said Alan Smith, chief executive of boutique chartered financial planning firm Capital Asset Management.

“I know many advisers are already making plans to move to [the] CISI. There is some concern about the ongoing ability to create SPS [a Statement of Professional Standing] which every adviser must have in order to operate.”

Smith said the CISI is beginning to show signs it understands ‘real financial planning’, something he feels the CII “clearly does not”. 

For that reason, Smith said the CISI could be a “legitimate replacement”. 

“If not, then real financial planners are likely to create their own body,” Smith concluded.

Mass migration to CISI ‘not going to happen’

Some have highlighted potential limitations to the CISI as a PFS alternative - largely due to the make-up of the PFS and how the CISI differs.

Former PFS president, Rob Reid, said with around 8,000 chartered members belonging to the PFS, that leaves around 29,000 other diploma-holding members.

“The majority affected are not at chartered level,” Reid explained.

“Some people have switched to the CISI. But I’m not sure they [the CISI] would want to take the diploma holders. A mass migration is not going to happen.”

In July 2021, the CISI received consent from the Privy Council to award the chartered designation to financial planners.

Reid suggested a mass move of financial planners could also place an administrative burden on the CISI it may not want. The professional body, which is international, has 45,000 members spread out over 100 countries.

The CISI told FTAdviser, however, that it is "always open to welcome new members, whether that be more experienced financial planning professionals or those in the early stages of their career".

Asked for his thoughts on a new body, Reid said: "We wouldn't build something the same today. So the problem is, does the CII understand what the sector needs anymore?”

We need a reasonable alternative which will unite the profession. Whether that’s the CISI or another body, I’m not sure.Lee Robertson, Octo Members Group 

He used the example of the CII piloting a new form of assessment for the R06 Financial Planning Practice unit which would see written examinations replaced by coursework.

“Do we only want coursework tested? It may make it easier to run exams, but does it make them [qualifications] better?” said the former PFS president.

“Should we just build something clean and separate from what currently exists? If we do that, we should use it to manage conflicts of interest. 

"A new body would suit everybody, as there'd be no baggage. But it would be a disaster for the CII, given its financial struggles. If a body appears with the right backing, then it’s not inheriting a bad computer system, bad working practices, or marred management."

Starting up a new body, Reid said, means there is an opportunity to ‘de-bundle’ the PFS offering and potentially offer parts of it at a lower cost.

He used the analogy of a flight and an all-inclusive holiday.

“With the PFS, everything is thrown in - CPD, SPS, CPD events. Many advisers don’t care about the CPD events. If someone could unbundle the proposition, they might be able to undercut the PFS on price. 

“An employer will just see this as a saving, as the majority of members don’t have the emotional investment that chartered firms do.”

Some 55 per cent of exams taken in 2021 at the CII were PFS exams, according to former PFS planning panel chair, Alasdair Walker.

He cited a conversation with the CII's chief operating officer on a podcast hosted by Timeline chief executive, Abraham Okusanya, making the point that the PFS represents a substantial proportion of the CII's revenues.

‘We don’t need a clone of the PFS’

Whilst the recent in-fighting between the CII and the PFS has sparked talk of a new body, some are wary that if a new body emerges, it should be for the right reasons.

Ian Else, founder of 4 Financial Planning, said: “A new body should be something born out of desire not because of a hostile takeover of the PFS by the CII forcing our hand.

“The PFS seems like it’s modern, open and understands something about financial planning and what we do, while the CII offers little except exams. 

“I hadn’t been an adviser long when the IFP [Institute of Financial Planning] ceased to be and that was a great shame.”

Octo Members Group chief executive, Lee Robertson, is also wary another professional body could add more noise and disruption to the industry, rather than less.

“I don’t think we need a clone of the PFS,” said Robertson.

“Too many professional bodies would just further splinter the professional community. But like any dispute, there has to be willingness from both sides to move forward. It’s very difficult to backtrack once one side goes public and blames the other.

"We need a reasonable alternative which will unite the profession. Whether that’s the CISI or another body, I’m not sure. Any alternative would need to carry forward the PFS's legacy. 

“We've worked so hard through the PFS to build trust with the public. This public spat could underdo 20 years of good work."

‘No money’ to set up alternative

Former PFS planning panel chair Alasdair Walker has raised the issue of time and cost in setting up an alternative body.

“Seed capital, hours of work - hundreds of thousands probably- who's going to do it?” Walker said on Okusanya's podcast 'Retirementals'.

One adviser, who preferred to remain anonymous, highlighted the same issue to FTAdviser.

They said that while they’d heard talk of a “rogue” body, no action had been taken to get this in motion that they were aware of.

“There’s no money to do it,” they said.

The CII has told FTAdviser its board “remains deeply committed” to its PFS members and “wants to see the PFS flourish” as a professional membership body. 

The chartered body added: “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 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.”

ruby.hinchliffe@ft.com