A former member of the Personal Finance Society board has written an open letter outlining her “grave concerns” over funds held by the Chartered Insurance Institute.
In the letter published today (November 30), Vanessa Barnes calls for action from Andy Briscoe, who was appointed as PFS director by CII in July.
A dispute between the two bodies started in December 2022 when the CII announced it was taking control of the PFS board amid "failed mediation".
Since then, there have been a number of exits and appointments to the group.
In her letter, Barnes claims more than £10mn of PFS members’ funds is held by the CII.
She wrote: "The PFS board is now saturated by CII appointed directors with the declared intent to gain a majority control.
“This is of significant concern to members given the evident conflicts of interest and possibility of insolvency and the continued lack of openness and transparency regarding the true financial position of the institute.
“The PFS board members have a fiduciary responsibility to ensure that all known risks have been properly mitigated and seek your assurances that this has not been unduly influenced or impeded?”
Barnes went on to ask why money was not being held in a dedicated PFS account by the CII.
She said: “We would like to understand why the board feel it is appropriate to have a significant part of the members’ reserves held ‘in a multitude of different areas’ and ’with other debtors’ as explained by Don MacIntyre at the PFS AGM rather than a properly designated PFS account.”
Barnes raised concerns over whether a liquidator would consider funds not held in a dedicated PFS account as not belonging to the PFS.
She said: “Some members are concerned that the real reason for the appointment of a majority of CII employees to the PFS board was not due to concerns regarding governance but a construct in order to demonstrate to the CII’s bankers that the CII is in control of the PFS member reserves.
“Some members believe that the CII repeatedly misleads the membership of the insurance sector, local institutes and the PFS with a narrative around the consolidated group accounts and is careful not to publish a [profit and loss statement] for the institute alone, despite repeated calls to do so.
“Careful review of the published PFS accounts and the CII financial statement, particularly the balance sheet, highlights a number of grave concerns.”
In the letter, Barnes also puts a series of questions to the current PFS board.
This includes: “What concerns have you expressed to the CII board regarding the fall in institute current assets to a negative figure and what questions have you raised concerning the significant level of trade debt held by the institute?”
Barnes’ letter comes a month after another letter, signed by at least 160 PFS members, called for an immediate transfer of funds from the CII.
