Members of the Personal Finance Society have signed an open letter to the board outlining their concerns and calling for all PFS funds to be transferred to that organisation's control.
In the letter, dated today (October 27), Alasdair Walker, chartered financial planner and author of the open letter, called for members who share the same concerns to add their names as signatories.
There are currently 159 signatories other than Walker himself.
The letter urged the PFS board take the following "urgent" steps:
- Seek an immediate transfer of all PFS funds to an account in the sole name and control of PFS.
- Provide an undertaking not to allow PFS funds to be ‘re-charged’, or ‘re-addressed’, or invoices for ‘past adjustments’ to be accepted.
- If CII are unable to transfer funds immediately, to initiate proceedings for recovery of the funds via the courts.
- Make immediate amendments to the articles of association to clarify the position of PFS funds in the event of wind-up, and to protect the body against further threats from CII.
Walker wrote: “I first wrote to the board with my concerns on February 1, 2023, and explained that I intended to publish the letter I wrote a week later if a substantive response had not been received.
“I have, to date, not received a response. I chose not to publish the letter at the request of people close to the board, on the promise that a substantive response would arrive.”
He explained in the letter that no response arrived and he was assured at the annual general meeting last month by PFS interim chairperson Andy Briscoe, that the letter would be re-circulated and a response would be given.
“To date, that has still not happened,” he wrote.
“At the AGM, a series of unsatisfactory answers were provided to members, including myself, who asked serious questions about their concerns.”
It comes as yesterday the CII interim chief executive Alan Vallance stepped down.
Walker said the PFS is a member organisation limited by guarantee and, while the CII has special status as a PFS member by virtue of the articles of association, it cannot ‘own’ the organisation.
“I believe the current mess stems entirely from this fundamental misunderstanding.
“My understanding is that the CII is close to running out of liquid funds as a result of operational overspend for at least the last five years.”
He claimed that the PFS had made operational surpluses year on year while paying above market rates for all services provided by the CII.
As a result, he argued the PFS has around £20mn in member reserves.
“I understand that the PFS has 'sight' of £10mn of this, but the funds are held in an account requiring joint signatories from PFS and CII.
“The other £10mn is apparently held on trust for PFS members by CII."
Speaking to FTAdviser, he said: “I continue to have deep concerns over the future of the PFS/CII, and despite assurances that I’d get a response to my letter, originally sent in February, and subsequently at the PFS AGM, one hasn’t arrived.
“I am hoping that the CII and PFS might pay some more attention if they realise how many members care, and want change.”
Legal or regulatory action?
Other PFS members, who signed the open letter, agreed with Walker.
Some argued there may need to be more action taken if the CII and PFS did not respond.
Carl Woodward, director at Simplify Consulting, said: “We are PFS members and evidently there is a concern if funds have gone missing and there should be a full investigation with complete transparency to explain to the PFS membership what has happened.
