The Personal Finance Society was hit by soaring costs in 2022 as it spent heavily on legal and consultancy fees during its row with parent body the Chartered Insurance Institute.

Legal and consultancy costs, including extra public relations support, resulted in bills totalling £2.2m, the lion’s share of a £3.2m rise in operating expenses during the year.

Total operating expenses in 2022 rose to £7.99m and pre-tax profit for the year fell from £3.39m to £1.74m.

There was a significant increase in legal fees (£850,000 in 2022) and consulting costs such as public relations (£1.35m in 2022) during the row with CII. Membership revenue also fell slightly although it picked up later in the year.

The PFS was also hit by a drop in revenue. Revenue for 2022 was £9.76m, down £1.62m on 2021 (£8.14m). Sponsorship for the Festival of Financial Planning held in 2022 help soften some of the impact of higher costs.

In its Annual Report the PFS defended the extra costs as being necessary to help the PFS board during a turbulent time.

The annual report says: “The PFS board brought in expert, external consultants to support the company's directors legal, financial and communications efforts during their discussions with the CII on a future operating model of the company within the group.

“Much of the rest of this spend was to enable the PFS to have its own communications function during a sensitive and challenging time for the organisation. The complex nature of these discussions required expertise to enable the board to navigate new territory.”

PFS net reserves at 31 December 2022 were £17.25m (2021: £15.71m) which represents approximately 25 months (2021: 40 months) of operating expenditure. The PFS said this provided sufficient protection against, “future risks and uncertainties” which may be faced by the company.

The PFS said that in September 2022 it entered into a mediation process with parent body the CII but this was interrupted in December. A public spat between the two bodies about governance, the use of reserves and the future direction of the PFS in December 2022 resulted in multiple PFS board resignations. The PFS says in its report, however, that it intends to conclude the mediation this year.

In the report the PFS says: “It has been the top priority of the PFS's board to reach a settled position after a considerable period of turbulence. We recognise that this has been a source of concern amongst both our individual and corporate members.”

The PFS is also engaging with the CII, its exam provider, to tackle concerns about on-line training and examination processes which continued to be disrupted in 2022.

Despite the row with the CII, PFS membership rose by 658 during the year and there was a rise in Chartered Financial Planners too.

The PFS ended the year with 40,032 members, an increase of 658 compared to 2021. There are now 7,980 Chartered Financial Planners, a rise of 337 during the year and 209 members became Fellows in the year pushing the total to 3,827.