Keith Richards, the former chief executive of the Personal Finance Society, has said actions taken by the Chartered Insurance Institute were a “significant mistake” and an independent review could be a way to provide clarity.
Speaking to FTAdviser, Richards who is the current chair of the Financial Vulnerability Taskforce, said the attempts by the CII to publicly position itself as “stepping in to rescue the poorly managed PFS" was a "significant mistake”.
Before Christmas, the CII announced it was to appoint a majority of directors to the PFS board, following what it called failed mediation attempts and poor governance issues.
Richards noted that the approach has not gone down well with anyone, especially members, and described the situation as “a very sad state of affairs”.
He said: “The whole public debacle created by the CII was so inappropriate and unnecessary.
“The ongoing publicity and social media coverage of the CII’s attempts to seize majority control of the PFS continues to raise questions surrounding the credibility of the CII’s capabilities to effectively manage its own operations and financial affairs."
Richards highlighted the statement given by Vanessa Barnes, a member director of the PFS, and the resignation statement made by former PFS president, Caroline Stuart, in which both refute the allegations of poor governance.
In Richard’s view, the CII now needs to properly inform the PFS what poor governance it is accusing it of.
“The CII is morally duty bound to supply the information to the accused PFS member directors, who are stating that they were not consulted or provided with any warning," he said.
“They have said the first they knew of the CII’s criticisms and intention to take control, was at the same time everyone else read about it in the CII official press statement. If true, this is both shocking and unacceptable."
He added: “I would hope by now that the PFS board have been afforded the professional courtesy and at the very least supplied with the evidence.
"The CII’s reputation, integrity and honesty is at stake and it is essential they act quickly and appropriately to mitigate further negative impact.”
Bemusement
Richards said he has been inundated with messages from advisers and other key individuals from across the wider industry in relation to the debacle.
“Most are bemused, some angry but all simply looking for answers and possible insight to explain why the CII seems to persist in bringing the profession into disrepute and driving deeper down a route of potential self-destruction,” he said.
“The CII’s credibility was further impacted this week by the ongoing and long running technical issues impacting exam sittings, which could not have come at a worst time for the Institute,” Richards added.
Based on the conversations Richards has had with members he said it is clear they want to see transparency and accountable leadership, but the responses from the CII so far have instead exacerbated matters and further eroded confidence and trust in the leadership.
