Personal Finance Society (PFS) president Caroline Stuart has resigned from her role and her position on the society's board.

In a statement today (5 January) Stuart said taking the role in September had been "the greatest honour" in her professional life.

However, Stuart said the PFS' ongoing problems with the Chartered Insurance Institute (CII) in recent weeks meant "pressure and stress has increased exponentially".

On 21 December, the CII announced it intended to appoint a majority of directors to the PFS board after long-running mediation over its future failed and "significant governance failures" emerged. This has since been refuted by the PFS, board members and its past president.

"I, along with my fellow member directors fully refute all allegations made by the CII," she stated in her resignation. "In my time as both a member director, vice president and president, my fellow members and I have taken our fiduciary responsibilities extremely seriously. We have performed them diligently, professionally, carefully and with the utmost integrity."

Stuart continued: "These allegations are baseless and without foundation and in my opinion, a clear attempt to justify accessing PFS funds to support a failing CII.

"In the last twelve months alone, I have spent over 440 hours volunteering on a pro bono basis with the PFS in my roles on the PFS board, the PFS paraplanner panel and mentoring through the connect platform."

Stuart also stated that the amount of time spent supporting the PFS had "often been to the detriment of my 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.

"The member directors of the 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 CII, 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."

PFS asked to be CII guarantor

Stuart also said "well-documented" funding issues at the CII meant the PFS had been asked to act as a guarantor to a credit facility.

"The information provided by the CII when they were seeking the PFS board to act as guarantor to the loan was in my view woefully lacking and insufficient to make a decision and despite the PFS board at that time requesting supporting information to be able to review and consider the proposal in detail, the information provided was either contradictory, inconsistent or incorrect—ultimately leading the then PFS board with no option but to decline the proposal in line with their duties to the PFS.

"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, coupled with, in my view, bullying and intimidation tactics in what I believe is an attempt by the CII to access the PFS' reserves, all culminating in the unilateral and in my view, autocratic actions taken by the CII on 21 December 2022."

Stuart said it was clear the CII was not only deteriorating yearly from a financial perspective but that the institute has "arguably failed to keep up" with industry innovation in recent years.

"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.

"Rather than being transparent about the causes for the financial situation, they have sought to lay the blame on the PFS."

'Governance failings'

The failings the CII state exist with the PFS management have also been addressed by Stuart in her resignation statement.

"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," she opined. "My fellow member directors and I completely and strongly refute all allegations made by the CII in respect of governance failings and despite numerous requests to provide evidence of these governance failings, to date, none has been forthcoming.

"Why is this? I believe it is because there is none, and these allegations are in my opinion blatantly the only avenue remaining for the CII to access the funds I believe they need to prevent the organisation completely failing."

Stuart also blasted the CII's treatment of its members and said they had been treated with "utter contempt".

"Furthermore, I am disgusted with the way the CII has behaved towards the PFS, the PFS members, and the PFS board," she added. "I believe they have attempted to gain access to the PFS reserves through bullying and intimidation of the PFS board, and when the member directors stood firm and these tactics failed, through the only option remaining to them - in my opinion, a cynical, disingenuous and autocratic takeover of the PFS board using unfounded and spurious allegations as the reason."

Professional Adviser has approached the CII for comment.

Read more: Everything you need to know about the PFS/CII power struggle