The Personal Finance Society (PFS) has voiced its shock at parent body the CII’s move to takeover its board by appointing three new directors yesterday.

PFS President Caroline Stuart said that the intervention by the CII came as a “huge shock” to the PFS.

The PFS is to hold an Emergency Board Meeting to discuss its next steps within the 30 day consultation period declared by the CII under the Articles of Association.

Ms Lord said in a statement last night: “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.”

Yesterday the CII appointed three new board members to the PFS board in an attempt to take control of its subsidiary.

The PFS said that the President and CEO of the PFS were not notified about the appointments until the morning of the announcement and shared its dismay at how members were informed via a membership email which the PFS President and CEO were not shown before it was issued.

The PFS, the professional body for Chartered Financial Planners, added that a number of its members did not receive the notification at the time and only found out about the move via the press.

The PFS also criticised the CII for not inviting a representative from the PFS to join the morning briefing hosted by the CII, which only came to the PFS’ President and CEO’s attention following press coverage of the event.

The professional body added that the content of a notice uploaded to the PFS website, purporting to be from it, was not seen by them before it was uploaded by the CII.

The PFS is a subsidiary of the CII, and its articles of association give the CII the right to appoint directors to the PFS board. The two organisations have been at loggerheads for some time over the structure and direction of the PFS. The CII last year axed the role of PFS CEO held by Keith Richards.

The PFS board is currently made up of five PFS member director and two institute directors, with the CII yesterday appointing three further institute directors which it said will, “equalise the PFS board with immediate effect.” 

The CII said it intervened at the PFS due to governance issues which forced its hand.

CII CEO Alan Vallance said that the PFS had set up new committees without CII approval and also held meetings without informing CII directors who were entitled to attend.

Mediation has been taking place between the two organisations over the past few months but was ended recently by the PFS, according to the CII.

The move by the CII to take full control of the PFS could open the door to the PFS to try to split off from the CII or pave the way for a new body for Financial Planners to be established.