PFS president Stuart resigns accusing CII of ‘bullying and intimidation’ to access body’s cash reserves

Personal Finance Society (PFS) president Caroline Stuart has resigned with immediate effect accusing the Chartered Insurance Institute (CII) of using “baseless” allegations of governance failures and “bullying and intimidation” to justify accessing PFS funds to prop up the body.

Stuart (pictured) announced her resignation as PFS president this afternoon in the wake of the CII’s controversial takeover of the PFS, launched days before Christmas, saying the move had deeply affected her health and professional work.

In her explosive resignation statement, Stuart called the allegations of governance failures “baseless and without foundation” and in her opinion, “a clear attempt to justify accessing PFS funds to support a failing CII”.

Stuart claimed it was “well documented” that the CII had made numerous requests to the PFS for funds – pointing to March 2021 when the PFS board was approached by the CII to de-register the PFS and for it then to act as guarantor to a credit facility provided by a leading bank.

Stuart maintained that the information provided by the CII when they were seeking the PFS board to act as guarantor to the loan was in her view “woefully lacking and insufficient to make a decision”.

She noted the PFS board requested supporting information to review and consider the proposal in detail, but said the information provided was either “contradictory, inconsistent or incorrect”, lead the then PFS board with no option but to decline the proposal.

 

‘Bullying and intimidation’

Stuart further claimed that 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”.

She alleged this was coupled with “bullying and intimidation” tactics in an attempt to access PFS cash reserves which she claimed culminated in the CII’s move to takeover the PFS board in late December.

Stuart argued the reasons for the CII action was because, “as can be seen in their published accounts, the CII is running out of money” as their overall financial position has been “deteriorating year on year”.

She added that as the delivery of insurance products to consumers has evolved and innovated over the last ten years, the CII had 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,” she said.

“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.”

Stuart also accused the CII of a “supposed massive overspend on failed transformation and IT projects” which she alleged has had a detrimental impact on the finances of the CII, which “could not even be resolved with the £21m 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” Stuart continued.

She said this was “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.”

 

Detriment to family life

Turning to the toll taken on her own mental health, Stuart revealed that in the last 12 months she had spent spent over 440 hours volunteering on a pro-bono basis with the PFS, adding the amount of time spent supporting the organisation had often been to the detriment of her 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,” Stuart said.

“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.”

 

EGM demand

Stuart concluded by claiming she believed the CII was relying on member “apathy or disinterest” to access PFS cash reserves.

“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,” she added

Stuart told members to “demand an EGM, use your voice and protect your PFS and its reserves from being consumed by the CII forever.”

The CII has been approached for comment.

 

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