In a statement released at lunchtime, she says she is resigning with the “deepest sadness” and has called on PFS members to halt the “strip mining” of the PFS’s funds and to fight for the future of the body.
Ms Stuart was elected as President of the PFS in September and was the first Paraplanner to become President of the PFS.
The PFS has been embroiled in a bitter row with parent body the Chartered Insurance Institute over the future direction and governance of the PFS.
Ms Stuart said the pressure the PFS board has been under for the past 18 months had been “to the detriment” of her health and she is resigning to preserve her health. She said she had worked hundreds of hours as a PFS pro bono volunteer, impacting her business and family life.
She said she believed the CII was intervening in the PFS board to gain control of PFS funds to prop up what she called, “a badly run, financially exhausted CII.”
Ms Stuart said since March 2021 the PFS board had been under “tremendous stress and pressure from the CII from threats such as de-registering the PFS and flooding the PFS Board with Institute Directors.”
She said this pressure had increased since the CII appointed further Institute Directors to the PFS Board on 21 December with the intention to appoint a majority after a 30 day Consultation Period. She said this was all done under the guise of alleged ‘governance failings’.
She said she and other PFS member directors “fully refute” the CII’s allegations about governance failings and said her colleagues had always acted “diligently, professionally, carefully and with the utmost integrity.”
She said the governance allegations were “baseless.”
• This is the full text of Caroline Stuart’s statement:
“STATEMENT: CAROLINE STUART, PRESIDENT OF THE PFS, THURSDAY 5th JANUARY 2023
With the deepest sadness, I have today given my resignation as both President and Member Director of the PFS Board to the PFS Board, I will be standing down with immediate effect.
I have been working with the PFS on an entirely voluntary basis for close to eight years, both as a member and chair of the Paraplanner Panel and, since September 2018, as a MemberDirector and Vice President of the PFS Board.
It was the greatest honour of my professional life to be elected as President of the PFS in September 2022, particularly as I was the first paraplanner to be elected to the role.
Since March 2021 , it has been well documented that the PFS Board has been under tremendous stress and pressure from the CII from threats such as de-registering the PFS and flooding the PFS Board with Institute Directors. This pressure and stress has increased exponentially since the CII appointed further Institute Directors to the PFS Board on the 21st December 2022 with the intention to appoint a majority after a 30 day Consultation Period. All done under the guise of alleged ‘governance failings’.
I, along with my fellow Member Directors fully refute all allegations made by the CII. In my time as both a member director, Vice President and President, my fellow Member Directors and I have taken our fiduciary responsibilities extremely seriously. We have performed them diligently, professionally, carefully and with the utmost integrity. These allegations are baseless and without foundation and in my opinion, a clear attempt to justify accessing PFS funds to support a failing CII.
In the last twelve months alone, I have spent over 440 hours volunteering on a pro bono basis with the PFS in my roles on the PFS Board, the PFS Paraplanner Panel and mentoring through the Connect Platform. The amount of time spent supporting the PFS has often been to the detriment of my own business and family life.
The untold pressure that the PFS Board is currently under is now also at the detriment of my health and I have taken the very difficult, but I feel only, decision available to me to preserve my own health, and have resigned my position as President and Member Director of the Personal Finance Society, with immediate effect.
The Member Directors of PFS Board have for nearly two years been operating in the most challenging of circumstances, which at times has been to the detriment to our own professional and personal lives. These circumstances, created by the Chartered Insurance Institute, include numerous instances, in my opinion, of unprofessional and hostile behaviour of CII appointed persons, coupled with a failure of Institute Directors to attend PFS Board meetings, threats to make PFS Board meetings inquorate, ‘flood’ the PFS Board with Institute Directors, and to ‘de-register’ the PFS.
It is well documented that the CII has made numerous requests to the PFS for funds. In March 2021 the PFS Board was approached by the then CII CEO with a request firstly to de-register the PFS and secondly for it to act as guarantor to a Credit Facility provided by a leading bank. (CII Press Release 29.04.21 on https://www.knowhow.cii.co.uk/news/2021/cii-response-to-an-article-on-new-model-advisercitywire/)
The information provided by the CII when they were seeking the PFS Board to act as guarantor to the loan was in my view woefully lacking and insufficient to make a decision and despite the PFS Board at that time requesting supporting information to be able to review and consider the proposal in detail, the information provided was either contradictory, inconsistent or incorrect. Ultimately leading the then PFS Board with no option but to decline the proposal in line with their duties to the PFS.
In response to this, and despite negotiating in good faith with the CII, the PFS Board has since been party to numerous threats from the CII to flood the PFS Board, coupled with, in my view, bullying and intimidation tactics in what I believe is an attempt by the CII to access the PFS’ reserves, all culminating in the unilateral and in my view, autocratic actions taken by the CII on 21st December 2022.
I firmly believe the reasons for this behaviour from the CII is because, as can be seen in their published accounts, the CII is running out of money. Their latest set of published accounts demonstrate that their overall financial position has been deteriorating year on year.
The PFS has gone from strength to strength over recent years. Since RDR, the financial planning profession has grown, evolved and seen a significant raising of professional standards. The PFS has been a key driver of this; PFS member numbers have increased from all sectors of financial planning such as advice, paraplanning and compliance, raising the profile of our profession and increasing the revenues of the PFS and subsequent reserves.
In my view, the same cannot be said of the CII. As the delivery of insurance products to consumers has evolved and innovated over the last ten years, the CII have arguably failed to keep up with these changes. It is my view that a disastrous combination of arrogance, complacency and misguided business priorities by the leadership of the CII has potentially led to a catastrophic failing of the CII.
With declining member numbers, and an exam and learning proposition that is dated and in my opinion not fit for purpose, in addition to a lack of investment in exam delivery methods leaving them unable to innovate and provide a continued and consistent service during the pandemic, has seen falls in membership and exam revenue.
This coupled with a supposed massive overspend on failed transformation and IT projects has, in my opinion, had a detrimental impact on the finances of the CII, which could not even be resolved with the £21 million sale of Aldermanbury, our heritage building, as again can be seen in the published accounts.
However, rather than being transparent about the causes for the financial situation, they have sought to lay the blame on the PFS through the allegation that the PFS has underpaid their share of group costs, a myth that was clearly dispelled when in 2022 the then PFS Board appointed a well respected accountancy firm to undertake a thorough and independent review of the recharge and services provided.
Despite what I believe to be the very worrying state of the CII finances, they have professed that the action they have taken is ‘not about money’. However, it is crucial for members to be aware that based on legal advice received , claiming that there have been “governance failings”, is the only way in which the CII could justify to members the addition of further Institute Directors to the PFS Board to create a majority.
My fellow member directors and I completely and strongly refute all allegations made by the CII in respect of governance failings and despite numerous requests to provide evidence of these governance failings, to date, none has been forthcoming.
Why is this? I believe it is because there is none, and these allegations are in my opinion blatantly the only avenue remaining for the CII to access the funds I believe they need to prevent the organisation completely failing.
In addition to which, it is important that all members are aware that all governance services for the PFS are provided by the CII for which the PFS pays an annual fee through the recharge. I believe that it is very coincidental that the so called governance failings at the PFS have only been identified at the point that the CII are, in my view, desperate for money.
As a member of the PFS and the PFS Board, I cannot support the actions taken by the CII and by implying they are forming the majority without consultation, they have treated members with utter contempt.
Furthermore, I am disgusted with the way the CII has behaved towards the PFS, the PFS members, and the PFS Board. I believe they have attempted to gain access to the PFS reserves through bullying and intimidation of the PFS Board, and when the Member Directors stood firm and these tactics failed, through the only option remaining to them – in my opinion, a cynical, disingenuous and autocratic takeover of the PFS Board using unfounded and spurious allegations as the reason.
My professional life has always been driven by my high values of honesty, transparency and integrity. This has been demonstrated in my continual and constant commitment to the PFS for the last almost eight years. It has been an honour to represent members on the Board and I will continue to work to further the paraplanning and financial planning profession in any way I can, but sadly, this will no longer be through volunteering with the PFS when the CII’s values are clearly so vastly far removed from my own.
However, I will continue to give my support for the PFS in any way I can and I would also encourage all PFS members to do the same.
But, as these actions will affect us all, I also call to every member of the PFS and CII to scrutinise the position of the CII yourself so you can hold the leadership team of the CII to account for what is in my view is a list of major failings:
- The state of the CII finances and the potentially reckless squander of millions of pounds under the leadership team’s stewardship over the last six years
- The poor quality of the services provided to members, including exam and CPD provision, SPSs, renewal of membership fees, all underpinned by an arcane and failing CRM system
- The complete lack of any corroborating evidence to support their allegations,
- What I believe to be the misinformation and misdirection from the CII to draw any and all attention away from their own potential governance failings.
I believe that the CII are hoping to access and move some or all of the PFS reserves to the CII and are relying on member ‘apathy’ and disinterest to enable them do this. I therefore implore all members of the PFS, to take whatever action you can to help prevent the wholesale strip-mining of the PFS and its reserves, by and for the benefit of propping up what I believe is a badly run, financially exhausted CII. Demand an EGM, use your voice and protect your PFS and its reserves from being consumed by the CII forever.
