Baroness Helena Morrissey has quit as chairman of AJ Bell after just nine months following a row with the City watchdog over the company's board.
Baroness Morrissey and the AJ Bell board clashed with the Financial Conduct Authority (FCA) over plans to appoint Andy Bell to the fund shop's board.
Mr Bell, who built the Manchester-based company into one of Britain’s biggest fund supermarkets and owns a 23pc stake, resigned as AJ Bell’s chief executive in June and was set to become non-executive deputy chairman.
However, the FCA objected to the plan, citing the “risk to effective board governance that would arise if a founder chief executive with a significant shareholding remained on the board after stepping down as chief executive”.
Evelyn Bourke, AJ Bell’s senior independent director, said: “We were unable to agree our preferred role for Andy with the FCA and Helena believes it is the right thing for her to step aside so a new chair can take the board forward.”
Baroness Morrissey, one of Britain's best-known financiers and a leading female figure in the City, will continue to work with AJ Bell on a “consultancy basis” to advise on issues such as diversity and encouraging more women to invest.
The row highlights the difficulty of succession planning at founder-led companies and comes at a difficult time for investment platforms like AJ Bell, which have struggled in recent months due to a market downturn triggered by the war in Ukraine and the cost of living crisis.
Mr Bell has previously hit out against “box-ticking” governance rules, claiming that he did not even know his own pay because City rules made remuneration policies for listed companies so complicated.
Baroness Morrissey is well-known as an outspoken figure in the City. While at St James’s Place, the mother of nine openly criticised the company's fee structure and incentive scheme, highlighting the need to improve transparency in the industry.
Until June, she was also lead non-executive director at the Foreign Office but quit after criticising Boris Johnson’s leadership.
Baroness Morrissey resigned from the board of St James’s Place after just 14 months to take up the position at AJ Bell last year. The Conservative peer replaced long standing chairman Les Platts at AJ Bell, who had held the role from 2008 until last year.
Baroness Morrissey's previous roles have included more than a decade as chief executive of Newton Investment Management, as well as head of personal investing at Legal & General and chair of the Investment Association trade body.
Baroness Morrissey said: "I am looking forward to continuing to work with Michael and the wider AJ Bell team to encourage more women to think about investing and to advise the company on its diversity and inclusion strategy."
AJ Bell said the FCA's objection to Mr Bell joining the board was "consistent with previous messages given to other regulated firms and is no reflection on the fitness and propriety of AJ Bell or Andy."
Mr Bell said: “My focus will be on helping to build the AJ Bell brand as well as continuing to support AJ Bell’s campaigning and lobbying efforts on behalf of retail investors and financial advisers. I have complete confidence in the board, Michael [Summersgill, incoming chief executive] and the wider management team.”
Ms Bourke will lead the search for a new chairman and Baroness Morrissey will remain on the board until a successor is appointed.
The FCA declined to comment.