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- Opening Remarks and AGM Formalities
- Christine Elliot welcomes everyone to the AGM and acknowledges the members’ participation both in person and online.
- Christine highlights the importance of member engagement and confirms a quorum of 15 members.
- Voting instructions are provided for both online and in-person attendees, with a reminder that only four members are entitled to vote.
- Christine introduces key members of the PFS, including Carla Brown, Daniel Williams, Matthew Hill, and Trevor Edwards.
- The minutes from the 2023 AGM are approved without corrections, and Carla Brown begins her presentation as the new PFS President.
- Carla Brown’s Presidential Vision for 2025
- Carla Brown reflects on her predecessor Anthony Ward’s tenure, focusing on future-oriented themes: clients, members, and the relationship with the CII.
- Carla emphasizes the importance of financial education and engaging with young people to build financial literacy and attract new talent to the profession.
- She highlights the need for the PFS to become louder sector thought leaders and to build on existing initiatives to spread financial knowledge.
- Carla discusses the gender imbalance in the financial advisory profession and the introduction of a new generation scheme to support young professionals.
- She outlines her vision for the PFS to be more vocal in supporting victims of economic abuse and to enhance public trust in the profession.
- Financial Performance and Business Activities Report
- Trevor Edwards presents the financial statements for the year ended December 31, 2023, noting a decrease in total membership revenue to £7.2 million.
- He explains the concept of deferred membership revenue and its impact on the financial statements.
- Trevor highlights the operating expenses for 2023, which were around £1 million higher than the prior year, and the new cost-sharing model with the CII.
- Daniel Williams discusses the PFS’s professional development events, including regional events, digital assets, and the annual conference.
- He emphasizes the importance of attracting new talent and nurturing young professionals to grow the profession and improve standards.
- Formal Business and Voting Results
- Christine Elliot confirms the results of the formal business items, noting that the report and accounts and the reappointment of the auditor did not pass.
- Carla Brown reappointment as a member director and Ben Wright’s appointment as a member director are approved.
- Christine announces the appointment of Christine Elliot as a lay director, and the meeting moves to address member questions.
- Christine acknowledges the feedback from members and emphasizes the board’s commitment to transparency and accountability.
- Addressing Member Concerns and Questions
- Christine and other board members address questions about board appointments, finances, and the relationship with the CII.
- Matthew Hill explains the decision to appoint CII directors to the PFS board and the importance of connecting the PFS’s ambitions with the CII’s delivery infrastructure.
- Trevor Edwards clarifies the intercompany balance between the PFS and the CII and the proposed recharge for 2025.
- Carla Brown and Daniel Williams discuss the PFS’s strategy for thought leadership and regional initiatives to support members.
- The meeting concludes with a commitment to provide detailed responses to all questions and to continue engaging with members to address their concerns.
Full transcript
Please note, AI transcripts can contain factual and transcription errors. This summary has not been checked for errors and is provided as-is.
PFS AGM
Tue, Nov 11th 2024, 16.30
SPEAKERS
Questioner 1, Questioner 2, Christine Elliott, Daniel Williams, Trevor Edwards, Matthew Hill, Carla Brown
Christine Elliott 16:40
Got it a warm welcome to everyone in the room. I’m sure you will realize this is the AGM, which we are about to start. And thank you to everyone who’s in the room, who’s exercised their right to vote beforehand and those who are online today. I’m Christine Elliott, the chair of the PFS. There are two common failings of membership bodies. One is that they can be too inward looking, and we’ve heard a bit about that this morning in our interactions, which were extremely helpful. But also the other is that they can become apathetic. I am pleased to say that you have disproved that in buckets, that the engagement of members around these events, you know, today, tomorrow, and indeed, the AGM, have completely proved that disproved it. And I, you know, I thought that that would be the case. And I’m very delighted that you’ve all taken the time being just past 430 UK time, I think we’ve got about 15 members. It looks like it to me. So that is good. We have a quorum. I declare the meeting officially open. Just to give you some expectations on timing, we have a lot, an unprecedented amount of questions. They fall into themes. And you know, a good result is that you feel that the key issues that these themes pursue have been well aired. We may not, and this is not managing away questions. We may not be able to cover everything in the room this afternoon, but we do commit to sending out a full list of all of the questions with answers that you can hold us to account against. Further on, the formal business schedule has now reopened on the I have that confirmed on the AGM portal online, and for those in the room, you have handsets, voting will close in around 10 minutes time. There will be a five minute reminder. And just to tell you what you know, only four members of the PFS are entitled to vote. For those voting online, you can now cast your vote by selecting the polling icon on your screen. There’s also detailed guidance on the home screen. If you’ve already voted, you don’t need to do so again, unless you wish to change your vote for everyone voting in the room, please follow the guidance you received when you got your handsets. If you need any help, raise a hand and a member of a team will assist you. I’m pleased to welcome online a representative of our current auditor, CRO Julia Porter, who can, if necessary, answer any questions and moving on with the business that we’re all here for I am delighted to be joined on stage by our current president, Carla Brown, Vice President Daniel Williams, along with fellow PFS board members, Matthew Hill and Trevor Edwards. Trevor has been finance director of the PFS for five years, while Matthew is also chair. Chief Executive of the group coming up then to the minutes of the 2023 AGM, the first item of business is the approval of those minutes held on the 19th of september 2023 these have been made available online as no corrections have been raised, that remains true, I will therefore sign these as a true and correct record of the proceedings Following the meeting and next the presentation from our new PFS President, Carla Brown,
Carla Brown 20:39
thank you, Christine, good afternoon, it’s a real pleasure to be here at the start of my term as president of the personal finance society. I’m genuinely excited to have been asked to take up this role, and I intend to serve PFS members to the very best of my ability in an open and transparent way. I’d like to begin by briefly reflecting on our predecessor, Anthony Ward’s tenure as he’s not able to be here himself today. The theme of his presidency was the future, and he sought to advance the work of the PFS through three lenses. First, the future of our clients, where we emphasized the importance of the PFS raising professional standards and encouraging personal finance profession to be ever more client centric. Second the future for our members, where we stress the need for the PFS to continue to provide value to members and attract new and diverse talent into the profession, so that we can have a profession that thrives and represents all the communities that we serve. Third, he considered the future relationship with the CII group, and he said that we must work with the CII to achieve our goals and be a force for good, partnering on key strategic priorities. I concur with all three of these, and before I set out my own themes for 2025 I would like to touch very briefly on this last point, the position of the PFS within the CII group, because clearly there has been some recent commentary about it. In the recent weeks. Last year, as a board, we benefited greatly from a group of institute directors who helped us begin to work through some challenging governance matters, drawing on their significant cumulative expertise across a diverse range of sectors, I would like to personally thank Neil watts, Neil Buckley and Catherine Seddon for their contributions. More recently, the CII group board has taken the decision, as it is allowed to do so by the articles of association, to appoint institute directors who all hold leadership roles in the CI group. We have had our first board meetings together now and discussed how this change can help us to achieve our strategic ambitions. On behalf of members, I look forward to working collaboratively with our new colleagues, building on the momentum that we established under our previous composition. I would also like to give my personal thanks to Don McIntyre, our interim CEO, who stepped down at the end of October. Don worked tirelessly in sometimes very challenging conditions to help position the PFS for future success, and I wish him all the best in his future endeavors. I would now like to move on to my presidential theme for 2025 which is education. During my tenure, I want us to do more to build trust with the public and ensure members receive the value support and guidance that we should expect as members of the pre eminent professional body for the financial planning profession. I’m particularly passionate about engaging with young people, especially ensuring there’s obvious avenues for progression that can make ours a career of choice. I’ve long been passionate about advocating advancing financial literacy amongst the young. However, I think we need to recognize that money still remains a conversational taboo for many families, and that financial education in schools is most certainly not consistent. Most of the beliefs and attachments that we have about money are formed in our very early years, and I believe that the PFS has a role to play in breaking down these barriers. Now, this is going to require us to become louder sector thought leaders at a macro level, as well as building on some of the pioneering initiatives that we already have in place to help help spread financial knowledge and education, classroom by classroom. On that note, I have always personally enjoyed supporting my personal finance skill sessions. And in the academic year 2324 we provided over 500 free financial education sessions, reaching over 18,000 students. That is a fantastic achievement, one that. Achieves multiple goals. Because first of all, it helps to build the financial literacy that we want every child to possess. Second, it helps us to sow the seed among young people that a career in financial services could be one they want to progress. And third, it helps us to indirectly reach parents and guardians alongside teachers to help us build public confidence and trust in our profession. Attracting more individuals, especially women, into our profession and making them want to stay is essential to the future of financial planning. It’s disappointing that still today, only 16% of financial advisers in the UK are female. This figure does improve slightly for charter financial planners, but still only to 23% earlier this year, the PFS produced a five episode podcast mini series inviting some of the best female talent in financial planning today to share their experiences of breaking into and excelling in our profession. It also has advice for employers and bosses looking to make the most of female talent. It’s a great series, and I really wanted to do more of this in 2025 I’m also delighted that PFS is going to introduce, during my tenure, a new generation scheme along the same lines as the highly successful CII scheme, which has now been operating for more than a decade. This gives young professionals the chance to shine in front of their peers, bringing new and novel ideas to the table. It gets them excited and noticed. And it’s these sorts of initiatives that will really make a difference, and I’d like to thank CII President Ian Callahan, for his support in making this happen for the PFS now, once we’ve attracted people, we need to keep them. And one of the things that I hear loud and clear from those who join our profession is the help they say they need beyond technical competence, training to develop soft skills and support in building their businesses is essential too, and I know from the work that I do with PS, PFS power is that we already do a good number of things for our members, but we can, and we should do more in this space, and finally, beyond our profession, I want the PFS to be more vocal in its support for those who have the potential To fall or have already become victims of economic abuse. I have shared personal experience of this, and I want to help us shine a brighter light on this area so we can reduce the potential for people to fall victim and give greater support should the worst happen. I very much, much look forward to working with my PFS board and the power panel colleagues on these endeavors over the next year in order to bring about some really positive change and ensure that members really feel they are receiving tangible value. Thank you for all your support, and I’ll now hand back to Christine.
Christine Elliott 27:56
Thank you, Carla, for those warm, positive, inspirational words you see a voting reminder. Voting will close in five minutes on the formal business. So we’ll now turn to the formal reporting. And we had, as Carla had indicated, anticipated that our interim chief executive, Don McIntyre, would be leading the session. But in his place, I have asked Trevor Edwards, the PFS finance director, and Dan Williams, our Vice President, to respectively talk about our financial performance and report the business activities of the PFS for 2023 May I start with Trevor over to you, please.
Trevor Edwards 28:41
Thank you. Christine, good afternoon. PFS members, those in the room, and also to those that are dialing in online, tuning in online, financial statements for the personal finance society for the year ended 31 december 2023 along with our new look annual report, have been made available on our website and circulated through the notice of the AA. The financial statements were also submitted to the company’s house in late September, as required under the Companies Act. The total number of members at the end of the year was 39,665 a decrease of 367 or 0.1 members, percentage members against 2022 the PFS issued 23,394 statements of professional standing to regulated practitioners during the year. Total membership revenue for the PFS for 2023 was 7.2 million, a decrease of 0.2 9 million compared to 2022 while a small part of that decrease was due to the reduced number of members during the year, a larger part of the decrease was due to the timing of recognition of more deferred membership revenue in 2023 as. Compared to 2022 now, if I may just take a moment to explain what deferred membership revenue is. This is the membership fees that are paid by members in one year that is recognized as revenue in the subsequent in subsequent year, the deferred, the deferred membership revenue as at 31 december 23 was 2.4 million pounds, and that’s an increase of 0.2 8 million pounds. The increase in the calculated deferred membership revenue resulted in less membership revenue recognized in 2023 and that will be held in the statement of financial position, and that will be released as revenue in 2024 the total result of the society was a profit after tax of 1.8 million pounds, and that is up from 1.5 million pounds in 2022 within this there was a reduction in revenue of 0.8 million from event sponsorship in 2023 for conferences, seminars and other training and professional activities reflecting member feedback. The adopted approach allowed the PFS to focus on content that is offered beyond potential sponsors, that offered by potential sponsors. PFS event activity was instead partly funded by PFS reserves, and this model of event funding is expected to continue in the future. Operating expenses in 2023 were around 1 million higher than the prior year. At 8.9 million pounds. PFS members receive a broad range of benefits, including qualifications, statements of professional standing and the opportunity to gain chartered status. The PFS pay is an annual recharge for these benefits, alongside operational services such as governance, marketing communications, HR and IT during 2023 the PFS board agreed a new cost sharing model with the group the central overhead recharge in 2023 was just under 6 million pounds, an increase of around 2 million in the year. Much of this increase was an exceptional charge of 1.2 4 million pounds representing non routine items which supported central capital expenditure and members qualifications. The institute also adjusted the intercompany balance by transferring a further 2.5 million pounds to the PFS. And that bring the brings the total transfers from CII to PFS over the past two years, 2022, and 2023, to 12 point 5 million pounds. The reduction in revenue and increase in costs resulted in a relatively small operating loss of 0.3 million pounds in the year. However, this was offset by interest income and a reversal of a tax provision which resulted in a tax credit in the statement of income. Consistent with these out turns, the net reserves of the society grew to stand at 19 point, 1 million by the end of the year, 31 December, 2023 and with that, I’ll hand over to Daniel.
Daniel Williams 33:23
Thank you, Trevor, and good afternoon, everybody. 2023 was a year of significant regulatory change, with the FCA consumer duty rules coming into effect July last year, we designed and launched a toolkit to help our members manage the change necessary to to comply with these requirements. This encapsulated two elements, First, identify, understand and bring a more intuitive language to the duty itself and those areas that directly apply to the advice profession. And second, through the development of proficiency, plus a product that allows members to self evaluate and identify training where it’s most needed and provide evidence of compliance to the FCA, our consumer duty toolkit was downloaded more than 6400 times in 2023 and if you haven’t used these products and services, I’d highly recommend them to you. The Society continued to deliver a comprehensive program of professional development events through our regional structure, and despite the conscious reduction in sponsorship to which Trevor referred, committing additional funding to support the program, we delivered a total of 78 regional events in 2023 as well as 17 specialist road shows. In addition to our in person events, we continue to grow our digital assets, our digital events platform, delivering more than 90. New webinars, as well as 6200 on demand from our digital library throughout 2023 we return to having an independent PFS officers conference the day before a highly successful annual conference in Wales, much like we are here today and tomorrow last year, over 950 members attended our annual conference, and tomorrow, we’re expecting over 1000 members. We’re also delighted to host an exclusive lunch for our 2023 personal finance award winners, and an entrance where Miss Claudia Winkelman hosted finalists and their guests. We conducted the awards for 2024 a few weeks ago, with Mr. V Nicole presiding. The society, once again, hosted our annual graduation event at London’s Westminster chapel chapel, where we welcomed over 290 members and guests, as we celebrated those achieving associate fellowship and Chartered Financial Planner status. Professional Standards continues to strengthen evidence by professional by the professional qualification, success of our members, the numbers of members becoming associates and fellows continue to grow as more than 200 achieved Chartered Financial Planner status in 2023 taking the total number to 8159 this commitment from members to push beyond the minimum regulatory qualification standards supports and aligns with the society’s objective of improving consumer confidence and trust and demonstrates the society’s strategic success in driving professional standards. The my personal finance skills schools, education program of which both Carla and I are passionate supporters, continue to deliver essential financial skills in schools, as Carla previously summarized, our Duke of Edinburgh financial skills program was also popular in its second year, enrolling more than 200 students as part of their bronze award. And we’re also encouraged by the positive response of employers and members to our new apprenticeship awards and schools to our vital work experience offer. As well, we built on the many existing activities that we already undertake each year to help our profession identify and nurture new talent. To date, more than 2400 young people have had the opportunity to take part in our in our virtual work experience, bringing to their attention the possibility of a career in financial advice and financial services. In addition, we continued to support the growth of our profession by actively engaging with educational institutions, attracting new talent and promoting the value of financial planning as a rewarding career path. We’re committed to growing the profession, and it’s improving its standards with consumers. Over coming years, we will deliver initiatives, aa, raising public awareness and understanding of the value that financial planning professionals bring to the individual and families that we serve, and we’ll continue to enhance our regional events, creating more CPD opportunities and combining the need for strong technical content with a focus of developing soft skills, which are so critical to client relationships and ultimately, business growth. I our priority themes for 2024 have been in line with the outputs of the strategic review we conducted in 2023 thought leadership has taken center stage with initiatives and platforms that have enabled members to share their expertise and influence. We’ve also continued to strengthen our relationship with the Financial Conduct Authority and partnerships with other professional bodies and collaborations will allow us to create a more comprehensive and interconnected support network for our members, advancing the profession and better serving their evolving needs and potential changes ahead. It is worth remembering that most of these positive endeavors will have a financial cost, as Trevor has outlined, the PFS currently has substantial reserves that provides significant protection against future risks and uncertainties which the society may face. It’s likely that the PFS board will take decisions over future years to invest some of these funds on behalf of our members. Utilizing the reserves will, by definition, mean that the PFS spends more than it earns in some years, resulting in operational losses. But importantly, any investment of the reserves will be both measurable. And planned to ensure that the PFS remains financially robust. Finally, I’d like to take a moment to wholeheartedly thank all of you, all the volunteers in the network of the PFS and the regions, for all of their help during the year. Their dedication is essential to maintain, maintain the future growth and professional standing of the society and the PFS board is deeply appreciative of everything that you do. Thank you. Back to Christine.
Christine Elliott 40:36
Thank you, Daniel, thank you, Trevor. Moving on to the formal business of the AGM. Voting is now closed, and I will confirm the results of each item individually. Each resolution included on the notice requires a simple majority to pass. The voting breakdown will, as always, be made available Following the meeting. Item one, that the report and accounts of the personal finance society for the period January 23 to year ended 31 december 2023 be received and considered that item has not passed. Item two, reappointment of the auditor, the resolution that crow UK LLP be reappointed as auditors of the Society for the financial year ending 31st december 2024 and that the directors be authorized to agree their remuneration. That item has not passed, there will be a process set out following that that is standard that we can elaborate on in due course. The next items are our special business items. And item three is the reappointment of Carla Brown. The resolution that Carla Brown, who retires by rotation, is to be reappointed as a member, director of the society at this annual general meeting, as approved by the Board of Directors, has passed item four, appointment of Ben Wright, the resolution that Ben Wright is to be appointed as a member director of the society at this annual general meeting, as approved by the Board of Directors, has passed. I am now going to hand over to Carla for the next resolution.
Carla Brown 42:34
Thank you, Christine. Item five, the resolution that Christine Elliott is to be appointed as a lay director of a society at this annual general meeting, as approved by the Board of Directors, has passed.
Christine Elliott 42:49
Thank you, Carla, thank you very much for your participation. We’ll post a breakdown of the formal results on the PFS website in the coming days, and again, I’d like to thank everyone for taking the time to pose all of the questions and to participate in the room and online. So while you know some of the resolutions have not passed, we will deal with that afterwards, and we make clear that we that the voting numbers are published so that you are aware of what proportion of the membership, etc, etc, it is as a board, we highly value the feedback of members, and will give these results our very careful consideration over the coming Days and respond in accordance with our articles of association, but the members have sent the board, as they have been doing throughout today, some really clear messages. I’m now going to move to try and blend the AGM questions, which, as I said, we have online ones. We have people in the room, and we have quite a substantial bank of questions that fall into a number of themes. I recognize the significance of your questions being asked in the context of an AGM. There are some common themes. And you know the important point about the AGM is that you are keeping us accountable. The board has agreed it wishes to operate transparently. So as I said, we will publish all of the questions, any outstanding answers, and the President and I are setting up a members reference group with the support of the board so that we can continue the conversations with you. We be attending a series of public town halls. And you know, there are other opportunities to participate in society’s business, not least the future appointment, which is imminent, I hope, of an additional member director, bearing in mind that the CII, of course, has the right to make. Maintain the majority. So let’s turn then to the themes of some of the questions. We’ve got board appointments as a theme, finances and accountability of the CII and, of course, the PFS and membership. And I’ll start with one of the questions posed. There was a significant level of disquiet expressed by members at the meeting that ratified the merger of the LIA and sofa sofa to create the PFS concerning item eight, point 10 of the original articles of association, which allows the CII to appoint the majority of non member nominated directors. The concerns were satisfied by the CII making commitment at that meeting that they’d only need to use eight point 10 in extreme circumstances where the PFS board went rogue and the CII had to force a majority. Was on that basis, members voted for the majority for the merger. An explanation for this has recently been given that the new appointments will bring additional strength to the PFS board and help achieve strategic alignment for the benefit of members in which decision was the CII being disingenuous at the time of the merger, or now, the CII has broken the commitment. Can the chair suggest how the CII can be held to account and what can be done to change the articles of association to prevent further broken promises and remove the incentive for such unethical behavior that is very strong stuff. The chair has a limited number of options to suggest, but the most important of them is operating transparently, which we are doing today and will continue to do in future. The urgent need to be focusing on delivery. And obviously there are technical mechanisms such as an EGM, if the strength of feeling as such, but we have to carry the whole membership. We have a representative group today, but it is only a group, and so I think you are doing a very good job of holding us all accountable. And we’ll just briefly ask any of my fellow directors whether there’s anything that they would like to add, we’ll come on to the questions about what the CII has the right to do around membership appointments. Matthew,
Matthew Hill 47:26
thank you. Christine, it’s a great question. There’s a lot to unpack in it. I hesitate to say that I’m going to channel Liz truss slightly by saying I don’t accept the entirety of the premise of the question. But I think the really important thing to say, from my point of view, I’ve been doing this job for seven months, I’ve been a director of the PFS for one month. Is that an observation I would make coming to this area afresh, is that, for various reasons, I think the PFS has tended in recent times to try to put some distance between it and its delivery infrastructure at the CII. And what do I mean by that? There’s an equation at play here. I’ve had the privilege today to sit in lots of sessions where members have expressed themselves with great passion and clarity, and the main message is you are not doing enough of the right things in the right way. And that has been heard on the other side of that equation is a PFS, a personal finance society, as we’ve heard from Trevor, that has humongous reserves. Okay, let’s not beat around the bush. Its reserves a way higher than it should. They should be for an organization of this nature. For comparison, the CI is reserves. Policy is to run reserves at about three to six months, and PFS reserves are running at what 21 months, something like that. So the what I’m working up to here is the reason why the CII appointed me and Trevor and Jill and Matt, who were also in the room, to the PFS board, was to create a stronger connection between what members want and the delivery infrastructure so we can really get motoring on things like restoring the regional events, improving CPD responding in all sorts of ways to the concerns that have been expressed today. And I would say that in recent times, that connection has been diminished and attenuated. We are changing that. And somebody I was talking to earlier on said, What are you going to say that’s different this time? And I will say that the difference is, this year, we are connecting the engine to the wheels much better by having CII directors who are responsible for delivery in the room with the PFS as part of the PFS, so that we can directly take that ambition and turn it into delivery. The. I’ll pause the sermon there.
Christine Elliott 50:01
I think that’s great. Thanks, Matthew. We’ve got a lot to cover. So we’ll move on to a financial one, which comes from online. What was this for you? Trevor, if you would, what was the exceptional cost that resulted in the recharge increasing dramatically? Was this justified given the lack of service felt to be provided?
Trevor Edwards 50:21
Thank you, Christine, and thanks to the member that posed that question. So as I indicated in the part that I had described, the PFS does receive a number of benefits and services from the CII, at which for which it pays aa recharge. It shares costs. It’s a group shared cost model. So all of the entities in the group, and the PFS is one of them, that benefit receives those benefits does pay a proportion of that cost, sharing the cost as as the costs are incurred, and with respect to the specific question of the one of the exceptional item that was asked so the PFS board had agreed that the PFS would support the capital investments that the CII had been making to improve its infrastructure. The CII had very notably, and it’s in our financial statements, making capital investments to improve its infrastructure over the last few years, and the PFS board had made a decision to support that by contributing in an element of that so that is the capital part, element of that, 1.24, and there was also an element of a contribution, which the PFS directors supported, again, to support The qualification that is provided to PFS members by the CII. Trevor,
Christine Elliott 51:45
thank you. Let’s stay with the recharge for a while, against the backdrop of a previous independent report that stated the recharge was too high and the CII were required to refund the amount of a charge in light of a poor level of service provided by the CII to the PFS Why did the PFS board agree to a significant increase in the recharge and is there a robust service agreement in place to ensure the CII are held to account for their service delivery? The answer, I believe, to the latter, is no, however, obviously your accountability does come in the form of board meetings. Anything else you wanted to say on the recharge Trevor,
Trevor Edwards 52:31
yes, certainly so with respect to that particular report that the question references I wanted to say that there are in a group structure such as ours, there are different ways in which costs can be shared or distributed among entities that participate and benefit from the services that are provided. The report that was referenced in that particular question is just one of those ways. However, the group has adopted, and has for quite some time a cost sharing model, and that is yet another way, and that’s the way that the that we have adopted, and that the PFS has participated in for a number of years. So we identify what is the total cost of providing the services, and using a particular cost driver. That cost driver could be number of customers. It could be a number of transactions, we share the cost among the entities that benefit from the from those costs. So that is the way that it is done, and that’s, as I said, that’s the way that it has been done for quite some time, and that’s, that’s what the group has adopted. Thank
Christine Elliott 53:34
you, Trevor. We’ll move around on some of the the questions. So this is one that says Don McIntyre told members that if he wasn’t present at the AGM, it would mean there is big trouble. Would the board be able to comment on this? Well, first off, the appointment of the PFS chief executive is a CII matter. Matthew
Matthew Hill 54:05
I mean, I’m rather Lou to sort of comment on remarks attributed to Don that I don’t know, you know whether Don said them or not, but let’s just for argument’s sake, say that he did say those. Well, let me say sort of with no flippancy whatsoever, that if the passion that I’ve heard expressed today can be equated to big trouble, there would have been big trouble with or without dawn. So, you know, the message is heard coming back to you know, Dawn isn’t with us, but there’s much less to this than meets the eye. Don was appointed as an interim CEO more than two years ago. That’s an awfully long time to spend as an interim and Don decided that it was time for him to develop his career in other ways, and he goes with our blessing and thanks for everything you choose. Achieved while he was here. Now, I happen to believe that the PFS deserves substantive, permanent, sustainable arrangements to ensure that the views of members can be reflected into the CII part of the delivery infrastructure, and that the CIS decisions and the reasons for them, and indeed, the PFS can be reflected back out to members, and there could be much more of a dialog in a way that many members have expressed today they feel is lacking, and that’s what we will be pursuing with pace and alacrity until we’ve got those arrangements in place,
Christine Elliott 55:41
thanks myth. Aa, that is great, who made the decision to remove four independent and experienced institute directors and replace them with executives who report to the CII chair. That was, I believe, a collective CII group board decision. Can you confirm
Matthew Hill 55:59
yes, it was a CII board decision. Just one point of clarification, the executives don’t report directly to the CI chair. They report to the CI board collectively. But the answer is the same,
Christine Elliott 56:13
thank you for that. Staying with the member. Well, the director appointments the CII employed members of the board, particularly the CEO the CII have a fiduciary duty as officers to protect CII financial interests, as well as a fiduciary duty to protect PFS member interests where these duties are obviously in conflict, will the board members recuse themselves from any votes or decisions? Yes. Thank you very much. That is great. So we can perhaps move to Well, there are many, many more about the director appointments, including, how was the PFS board informed of the appointment of four execs, CII execs, to the PFS board. And given there are a large number of questions about that, the PFS chair was informed shortly before their appointment by the CII. Shortly before their appointment, it was the CII chair who informed the PFS chair. So that is that one. We’ve had one about the service level agreements. So there is now a question about previous directors of the PFS who were terminated on October the first were improperly terminated, not told in advance, and were in fact seeking legal advice. Can the board provide an update on the apparent governments failing from the CII? I’m sure that’s a quick answer. Matthew from you, no, thank you. And there are many more good question, why is there such a high turnover of directors, so recent Institute appointments, those reflect decisions of the CII board, which, etc, in the interest of supporting members, will members be able to have a Vote on the demerger of the PFS from the CII, I can start on that one, which is any proposal needs to conform with the PFS articles of association and to be brought before the membership. However, what we would emphasize are the many benefits that PFS members get from being part of the group, including the all important SPS charter status, membership designations and associated world class qualifications. Offer anything else anyone wants to add? Look COVID. Matthew,
Matthew Hill 58:52
could I? So this is a question that comes up quite frequently. You know, should the PFS break away from the CII and become fully independent, and the answer to the equipment, Well, the answer is sort of, if that’s what PFS members want, that is possible, yeah, but I think it’s really important, if there’s going to be a debate about that particular question, just To remember some sort of fundamentals of the question. So many of the things that PFS members value, chartered status, qualifications, the SPS, they are all delivered through the infrastructure of the CII now that can be replicated under other arrangements. So, you know to take the SPS, for example. The CII delivers the SPS. We are the accredited body by the FCA. So we the CII is the accredited body by the FCA for the purposes of the SPS, if the PFS wished to set itself up independently, it. Need to find a way to replicate those arrangements and secure accredited body status, either by partnering with somebody else or by investing in the ability to do that for itself. That is not straightforward. That would be very expensive. Take time three, maybe four years, and even then, it’s not guaranteed that the PFS would get that accredited body status. So it is risky and it is time consuming, and is and it is expensive, or would be expensive, but it is possible, if that’s what PFS members wanted. Similarly, with qualifications, the CII holds the awarding body status for PFS qualifications. We are the we CI is the body that is regulated by Ofqual. For that purpose, the PFS could replicate that if it wanted to, but it would take time, and it’s not certain. And in between times, PFS members who depend on those qualifications and that SPS would have to do something to fill the gap. And finally, chartered status, the charter designations that many of the people in this room have, they come from the CIS Royal Charter. And if people wanted to go to CC, for example, which is what people, you know, lots of people have said that they’d like to do, it’s a different set of Chartered designations. So these are all thing. I don’t raise them as sort of saying, you know, stay with the CI, although that’s what my view actually is. But just so that everybody’s aware that it isn’t as simple as saying, let’s be free. And you know, tomorrow you would be it isn’t like and that’s something that members, I think, need to have in mind when they’re thinking about this particular issue, I will leave it there. Christine, thanks
Christine Elliott 1:01:42
very much, Matthew, that’s great. Comment here. Most positive you.
Trevor Edwards 1:02:18
That was asked so the PFS board had agreed that the PFS would support the capital investments that the the CII had been making to improve its infrastructure, the
Christine Elliott 1:02:34
or a repayment schedule with appropriate fees. Quite a lot of questions on that one. Too. Trevor
Trevor Edwards 1:02:40
certainly glad to take that one first off, just to clarify to members, the inter company balance that exists between the PFS and the CII is not alone. It is a transactional balance that arises from the fact that all the revenue from that generated by the PFS passes through CI is bank account. It’s an infrastructure system that has been set up many years ago with a view to trying to make the the operations more efficient by not having multiple accounts and multiple different channels of having to transact. So all of the revenue for the for the PFS passes through CI is accounts, and similarly, all of the expenses of the PFS are met from CIIS bank accounts. The difference between those two ins and outs represents a balance that is owed to or from, more often, to the PFS from the CII. That’s what that balance is, and that balance is represented by cash. That cash is held in CI bank accounts, mainly in deposit accounts, either 32 day call deposit accounts or 95 day call deposit accounts. And those funds receive the interest that is appended to those accounts. So it is interest bearing, it does generate interest, which can be seen in the PFS accounts. And just for reference, if, if you wanted to see that coming through, you need only look at the PFS accounts from the last few years, when the PFS only had 42,000 pounds of cash in its bank account, yet, still, its interest was way more than that in the same P and L in the same financial statements. So the PFS does receive interest. And I believe the question was, there was another
Christine Elliott 1:04:28
question. I think that that pretty much actually, yes, indeed. So
Trevor Edwards 1:04:33
so on the repayment part, because of the way that the operations are done at the moment with respect to the PFS, PFS expenses being met from the bank account of the CII. And I would also draw reference to the fact that the PFS does have direct expenses between three and 4 million pounds a year, two and a half to three and a half million, and this is not the recharge these are to meet. Costs, journal costs, Speaker costs, etc. So these are met from the PFS, sorry, from the CIS bank account. So from that perspective, it makes sense that there is an amount that is held by the CII for PFS to meet PFS expenses. So there has not been a discussion at the board with respect to repayment of the full amount. But there isn’t. There is value in having a certain amount of that balance exist based on the operational infrastructure that exists at this moment in time. Right?
Christine Elliott 1:05:31
Thank you, Trevor, what is the proposed 2025 recharge by the CII to the PFS?
Trevor Edwards 1:05:37
Well, the proposed recharge has not been considered yet. As was mentioned, I believe earlier in the day, we are in the middle of our business planning process right now, so that is currently underway, and it is yet to be presented to the PFS board for deliberation, so that will be considered as part of that exercise.
Christine Elliott 1:05:52
Thank you. I’m going to turn to the President and Vice President for the next one is, how can we hold the President and Vice President accountable with such short terms next year, it feels as though we’ll be asking the same questions to a different set of people. How can we hold you accountable?
Carla Brown 1:06:10
Well, hopefully
Questioner 1 1:06:11
it
Carla Brown 1:06:12
will be done to be reappointed next year. I think myself and Ben, but you can hold us accountable by asking us questions. We want to engage with members. We want to hear from you. So events like this are really important. The number of people who’ve actually voted in this year’s AGM shows that our members do care, and we want to hear from you. So if there’s anything that you feel that we’re not doing, that we should be doing, then please do get in touch. You. Watch my email address is out there contact me. The eyes
Christine Elliott 1:06:56
proposal to implement the experience for route to chartered in a highly technical profession, and then the context of consumer duty. How does this help improve consumer outcomes?
Carla Brown 1:07:12
I’m happy to take that one. So this was something that was brought to the board in pilot form earlier in the year, and the board at that time expressed no further wish in pursuing it at that time.
Christine Elliott 1:07:26
Thank you. Carla, another quick financial war on travel. Would The Pensions Regulator be content for a trustee also to be employed by the company who’s the sponsor to the pension and making decisions that could impact the financial well being of the PFS. I’m
Trevor Edwards 1:07:47
not quite clear on that question. I’m happy to take that one.
Matthew Hill 1:07:50
I think this is really it’s less a question about the pension regulator and more one about perceived
Christine Elliott 1:07:55
conflicts of interest. I agree, actually. And in terms of rules of TPR, there’s no breach, yes, but there
Trevor Edwards 1:08:01
was reference to a company employed trustee. And
Christine Elliott 1:08:06
believer is one. Well, let’s
Trevor Edwards 1:08:10
if we with your permission chair, I could probably take that question away. I’ll add it to the bank of responses that we give to members. Very
Christine Elliott 1:08:16
much. That is good during the last 12 months, and I think this is one for everyone. What tangible evidence is there of the CII promoting to the public the benefits of taking independent financial advice in the in the in the UK form through qualified advisors.
Carla Brown 1:08:35
I’m happy to take a response on that one. So we recognize that we need to become better thought leaders. We want to be the body that the press come to the media come to when they’re looking for quotes, when they’re looking for information. We’re also aware we need to be more dialog with the FCA, with the regulators. So this is something that’s very clearly setting our intentions going forwards.
Christine Elliott 1:08:57
Thank you very much. And I think we should answer this one collectively. Can you please explain why the CII and PFS are currently engaged in such a public spat, and do they realize it’s professionally embarrassing? Of course, it’s professionally embarrassing. You know, it’s disappointing that some commentators are choosing to portray developments in a particular way. What I can say as being relatively new again, back into the chair, is the board has been working together very hard. We have got that membership focus. Membership interests are the number one item on the agenda. So it may look like a bit of a storm. You. Membership interests are the number one item on the agenda, so it may look like a bit of a storm. We have got that membership focus. Members, the number one item on the agenda. So it may look like a bit of a storm, but the business
Daniel Williams 1:10:38
of the members, how we’re delivering for members, what we’re delivering For members and what we’re not delivering for members. You well, that needs to be the the the continued intention of the board, focusing on you guys, the members. You
Christine Elliott 1:11:26
think that’s great. Let’s move on. There was a significant data breach at The CII that was so serious the CIS
Daniel Williams 1:12:00
the intention of the board focusing on you guys, the
Christine Elliott 1:12:25
I think that’s great. Let’s move on. There was a significant data breach at the CII that was so serious, the CII was required to self report
Questioner 1 1:12:34
the rising from the CII AGM. One of the things that I was quite surprised about was the fact there’s been another view of CHO The Chartered corporate state status. So charter, corporate, charter, five, financial planner was introduced for a 10 year term in january 2020, and now not even five years in, there’s going to be 17 upgrades to the status. So I was wondering what involvement of the PFS Board have had in this, and what your view is, how many upgrades will affect financial planners.
Christine Elliott 1:13:26
That is an excellent does everybody? No, we are not aware.
Matthew Hill 1:13:38
So the review that the CI is currently carried out focuses on corporate chartered firms. Who is to move corporate chartered status to the next level, if you like, to make it really meaningful from the point of view of the public and recognition, to really strengthen the underpinning accreditation and assessment processes and to justify the hard work for all those firms that have already achieved it by really embedding and underpinning the value that it has to offer. Now we have some proposals. That very strong proposals, in my view, that we’ll be taking out for consultation early in the new year. I’d encourage every member in the room, whether they’re a member of the PFS or normally, a member of the CII, to engage with that consultation. Be very interested in your views, but this is something that will be a flagship part of our program for 2025
Christine Elliott 1:14:44
thanks. You had another question? Yeah,
Matthew Hill 1:14:52
we can hear just fine.
Questioner 1 1:14:55
Can I ask one about tax at the moment that it’s a member? Organizations, and it’s always been for the benefit of members, but now it’s controlled by the Institute, not by the by a member majority board. And also the articles were changed some years ago so the Unwind up of the PFS, any surplus would pass to the institute. That means we fail the conditions for mutual status, and we’ll be paying corporation tax. I just like to ask, how is that in the best interest of the objects with PFS?
Trevor Edwards 1:15:33
So thank you. So the the mutual tax status of the PFS is one that is subject to review based on the based on the requirements of mutual meeting, mutual tax, mutual trading tax status, as set out by HMRC. So that’s something that we will review going forward. We haven’t reviewed it yet for the 2023 year tax returns, which are due by the end of this year. We are currently undergoing that exercise. So up to this point, the PFS has been filing its taxes as a mutual trader. But as I said, we will be looking at it for 2023 tax return at this time, not no, that’s That’s correct. But as you rightfully pointed out, there have been changes within the PFS that we now need to look at in context of the rules, and we will make that assessment, and then that will be shown in the 2024, accounts when it’s when it’s published. Yeah, okay, I’m
Christine Elliott 1:16:41
conscious we are now at our pretty much at our deadline for closing the meeting, but we’re going to give it five minutes more. I think there’s some questions in the room. Yeah, please.
Questioner 2 1:17:00
Thanks very much. I’m speaking on behalf of the membership I represent in Manchester. One of the questions we have, I hear from many, many financial advisors, is that we’ve had very competent board members, financial advisors, sitting on the board like Vanessa Barnes and others, who, for whatever reason, stepped aside. Matthew, what guarantees are you going to give us that who remains as financial advisors, their arms are not going to be tied and they’re going to be allowed to act in the interest of financial advisors and the PFS members. Because I get the impression for some reason, something is being blocked. I don’t know whether that is general incompetency, or there’s a hidden agenda, because all I can go is by past data that things were pretty good and things have gone badly wrong, and what is the reason, and what is going to be done about it?
Matthew Hill 1:17:56
So I think that’s a great
Christine Elliott 1:17:58
Should I take? Please do it? Was director that you.
Matthew Hill 1:18:00
So I think that’s I think that’s a great question. I can offer you personal observations, which I’m happy to do. Not everybody may agree with him, but it goes back a little bit to the question we talked about five or so minutes ago, about the PFS establishing its independence, and in my view, as someone coming to this area relatively fresh and perhaps a little bit less jaded by some of the arguments over the last few years, I think that there has been, I’m not sort of criticizing this, but I think there’s been quite a strong sense on the part of people who’ve been around the PFS for quite a little while that it should be independent, and it would be better being independent. And I think that has manifest itself a little bit as like sort of withdrawing from the CI is ability to deliver. So we want to be independent. So one of the ways we’ll do that is by putting some distance between us and the CII. Now, the problem with that is that it’s, it’s the CII and its staff who do most of the delivery. I mean, the fact we’re sitting here at this very professionally organized AGM today, it’s CII staff operating on behalf of the PFS that have delivered that tomorrow’s conference. I mean, you know, I was very pleased to see the sort of vote of applause this morning. It’s a CII events team. They’re going to organize. They’ve organized at what will be an amazing conference tomorrow. And I think the big strategic mistake that’s been made has been to put that distance in and to allow the sort of suspicion and mistrust to become the dominating factor in that relationship. And one of the things that excites me about now being on the PFS board is being able to do all the things that I think I can do to recreate that connection and get to a point where we are good at taking the resources that have been built up and. Turning them into delivery for PFS members. Now it’s early days yet. I don’t know you. I’m sort of asking you to take me on trust, but that’s very much where I’m coming from. Close that gap, the CII is not the PFS enemy. I see so much on social media, in the trade press, like the PFS is fighting an invisible enemy, it reminds me. And I don’t know whether you can still say this sort of thing these days, but the you know, the last Japanese soldier on the Japanese on the Pacific Island emerging from the bush in 1975 to find the war had finished 30 years earlier. It’s that sort of thing we’ve got to try and get over. We are there to deliver mutually in the benefit of members of the institute, whether they happen to be mainly PFS members or mainly CII members, and that’s something I feel passionately about. My passion equals the passion I’ve heard this morning from members.
Christine Elliott 1:20:52
Thank you, Matthew, that’s great. Perhaps I might not have chosen that one on this day, but there we go. Two quick ones I’m going to finish with, please, can the board share the robust and transparent process they’ll use to find a permanent CEO and confirm they’ll be directly employed by the PFS to prevent any potential conflicts of interests. Quick one for you, if you could.
Matthew Hill 1:21:16
For me, yes, yeah, the PFS Terms of Reference, make the PFS CEO a CII employee and appointment. So I can’t give that guarantee, but I will refer to the answer I gave earlier on, which is my strong belief that the PFS needs access to someone whose job it is to be the lens in both directions between the membership and the delivery infrastructure, and that is something that I will be working very hard to support and deliver for the PFS.
Christine Elliott 1:21:47
Thank you, Julie. There’s a question on the floor, and there’s one at the front, and we’ll finish with the one at
1:21:53
the front. Hi. My name is Zara. I am Senior power planet at JD Power planning, and also a member of the PFS para planning panel. And what I really wanted to ask was about the thought leadership sort of side of things. I wanted to know what your strategy is in sort of achieving that sort of a status, who the target audience is for that so is that to the general public, or is that internally to others within the profession, and how are regional initiatives expected to contribute towards this intention and objective, just so that we can align with that and the strategy there.
Christine Elliott 1:22:30
Thank you, Carla,
Carla Brown 1:22:32
thank you Chair. Great question. As I’ve already said, this is an area that we really want to develop going forward. I think it’s important that we can help build public confidence in our profession, trust, credibility, so we want to become thought leaders in both the public domain, so working to build the consumer confidence, but also working with the regulators to try and influence policy, looking at how we interpret policy and what how can we Help the regional areas, which I think was the second part of your question. Well, we’d love to hear what it is that you want from us. You know, how can we help you in your line of work, in your in your regional committees? What can we do that will add value to you? We’d love to hear that.
Christine Elliott 1:23:16
Thank you. Was there a quick one at the front? I think we’re done in that case. Unfortunately, we’ve tried to cover this feed the bank of questions the few in the room. This will be frustrating for people who didn’t all get an exact answer to all of their questions, but as I said, we will provide those. We will let you have all of the questions and all of the answers. It may take us a little while to collate them, but I think we have most of the information to hand. So thank you very much again to everyone for joining us and taking part in the AGM. This is really much appreciated. I hope you are going to enjoy the rest of the proceedings, those who are staying on. And I now bring this meeting to a formal close. On behalf of the panel and the PFS board, I thank you for joining the personal finance society’s 2024 Annual General Meeting. Applause.