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Keith Richards is chairman of the Financial Vulnerability Taskforce and former CEO of the Personal Finance Society. He is also a former chief membership officer of the Chartered Insurance Institute. The Personal Finance Society is currently embroiled in a major dispute with parent body the Chartered Insurance Institute about its running and future direction. Here Mr Richards writes exclusively for Financial Planning Today about potential solutions to a bitter dispute.

The Chartered Insurance Institute's (CII) decision to air criticisms of the Personal Finance Society (PFS) Board members in public has shocked and outraged many across retail Financial Services and has shone a spotlight on what many see as unacceptable behaviour while heightening suspicion of financial issues at the Institute. 

Even though there is often no smoke without fire and some of the governance failings listed against the PFS Board may have merit, including the exclusion of the CII in the appointment of an interim PFS CEO which would not have helped matters, it is still hard to reconcile or justify the CII’s actions, especially in light of counter claims. 

The CII’s Royal Charter has a primary objective to secure and justify the public's confidence and trust in its members and the wider market. All the more bizarre, therefore, that the CII Board sanctioned the public criticism of PFS members and in doing so has brought the profession into disrepute. 

The CII brand and reputation has, of course, been under challenge for the past couple of years following various operational and exam failings which have negatively-impacted thousands of students and members throughout that time, both in the UK and internationally. The CII additionally received motions at its last two AGMs calling for an independent review of its controversial decisions, poorly-executed change programme and weakened financial position from the General Insurance membership and Local Insurance Institutes.

I was however particularly saddened to learn very recently that Caroline Stuart, President of the PFS, has suffered ill-health as a result of the CII’s aggressive behaviours and was forced to resign her volunteer position to take time out to recuperate. At a time when the CII should be leading the way on equality and metal health wellbeing, Caroline is a woman who gave her time on a pro-bono basis for her profession and was the first Chartered Paraplanner to be appointed to the prestigious position of PFS President. She was a shining role model and supported the commitment and drive to attract women into our profession and roles of prominence. 

When the CII launched its change programme in November 2016, its prospects for the future were positive. It had a good reputation, strong balance sheet, owned its own heritage head office, had stable and reliable operations, a highly commended customer service centre in South Woodford and a flourishing relationship with the PFS. The future indeed looked bright. Today however, that picture is not so positive with a shattered reputation, weak balance sheet, acting as a sub-tenant renting 50 desks at the Walkie Talkie building in the City of London, challenged operations, no highly commended customer service centre anymore and an explosive relationship with the PFS and membership.

The PFS on the other other hand is a separate company, limited by guarantee and its success during the same period has been down to its independent board, dedicated executive leadership and volunteer regional network. The achievements and initiatives of the PFS are very well documented for anyone to research, especially from 2013 to mid 2021, after which time the narrative by the CII was changed claiming the PFS's success to be due to the CII Board.

While the Personal Finance Society membership of c40,000 may look like the smaller contingent of the CII Group's c125,000 membership, it should be noted that over 60% of CII Group revenue has come from the Personal Finance sector and for this reason alone, suggestions of a separation were never a tenable outcome for the CII and may have hindered mediation. 

Both bodies had complemented each other for over 18 years and there is no reason why that cannot continue, if there is a will to do so on both sides.

There is a way forward and these are some potential solutions:

The situation can be rescued if the CII is prepared to listen and respond to member feedback and work with the PFS Board to find a better route in resolving their respective differences and needs.

Solution 1: The first thing the CII could do is to suspend its aggressive takeover of the PFS to demonstrate it is listening, genuinely cares and wants to consult members in a meaningful way.

Solution 2: Appoint independent mediators (agreed by both sides) as well as a panel of members to observe proceedings between the two boards - openness and transparency is essential to restore confidence and trust. 

Solution 3: Recognise and respect that the PFS had been run independently of the CII Board as a dedicated Professional Membership Body but part of the CII Group - there was never a question by the PFS Board of this position ever changing, even following de-registration attempts by the CII in 2017, 2019, 2021 and should continue to form the basis of a joint solution going forward - as should allowing the PFS to remain independent and member-influenced.

Solution 4: Find a mutually-agreeable solution to transfer PFS financial assets to the CII’s immediate needs, or as and when the CII’s own cash reserves fall below its expenditure limit, to mutually protect both bodies long-term interests and indeed that of its respective memberships.

Solution 5: Neither party should use PR or media campaigns to score points - lessons must be learnt that the PFS Board appears to have had no option but to publicly respond to public criticism they feel is unfounded - joint communications going forward would be best.

Actions speak louder than words - be mindful that actions must be consistent with stated intent or objectives, members are intelligent professionals who expect to be treated accordingly.

The CII has a long and distinguished history and it would be a travesty to see this issue result in longer term detriment when there are options available. The majority of people who have been in touch hope that reconciliation and a mutually-agreeable solution can be found, which satisfies the views and needs of members to ensure the long term benefit for all.

Keith Richards is chairman of the Financial Vulnerability Taskforce but writes here in a personal capacity. E: This email address is being protected from spambots. You need JavaScript enabled to view it. W: www.fvtaskforce.com

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