The Personal Finance Society has reported total operating expenses of £7.99mn in 2022, of which £0.85mn was towards expert legal and financial advice on the back of the CII saga.
In its full-year results ending December 31 2022, published today (October 25) on Companies House, the PFS said operating expenses over the year were £3.22mn higher than in 2021 (£4.77mn).
The PFS said the main reason for the increase related to event costs to support the in-person events held in 2022, such as the Festival of Financial Planning.
However, there was also an increase in consulting costs of £1.35mn. The accounts said the PFS had spent £0.85mn on expert legal and financial advice, "required by the unique circumstances triggered by the CII's desire to begin mediation from July 2022".
The PFS board brought in external consultants to support the company’s directors with legal, financial and communication efforts during their discussions with the CII on a future operating model of the company within the group.
The firm said much of the rest of this spend was to enable the PFS to have its own communications function during a “sensitive and challenging time for the organisation”.
“The complex nature of these discussions required expertise to enable the board to navigate new territory,” it wrote.
“The decision to engage external consultants ensured that the board received the best possible advice to support effective discharge of their director responsibilities throughout this process.”
The PFS also reported a central overhead recharge in 2022 of £3.83mn which was broadly in line with the previous year (£3.85mn).
The accounts also revealed that operating profit for 2022 was £1.77mn, a reduction of £1.60mn from 2021 which was driven by the increased costs.
The firm said taxation was £0.20mn compared to £1.67mn in 2021, which is “prudent” as the company continues its discussion with the tax authority regarding the status of historic tax assessments raised in late 2021.
Net reserves stood at £17.25mn, up from £15.71mn, which represents approximately 25 months of operating expenditure and "provides sufficient protection against future risks and uncertainties which may be faced by the PFS".
The PFS said its governance and operating model was a principal focus for the board during 2022 as it entered mediation with the CII in September 2022.
“That process was interrupted in December 2022, however, this end goal will remain for 2023,” it said.
“It has been the top priority of the PFS board to reach a settled position after a considerable period of turbulence.
"We recognise that this has been a source of concern among both our individual and corporate members.”
Throughout 2022, the PFS board engaged external legal, financial and communication advisers to support it in reaching this position.
The advisers were initially engaged in late 2021 to advise on directors’ duties and matters relating to challenges between the CII and the PFS.
“It was necessary to engage professional advisers to ensure that significant decisions were informed by impartial, expert, professional advice,” it said.
