The Financial Planning Association has selected 11 chapters to be part of a “beta test” for a new organizational structure meant to guide the group’s efforts to centralize elements of their operations at the national level, and standardize others, including technology, staffing, financial reporting and program content.
During a meeting with Wealthmanagement.com editors, the leadership of the FPA also addressed the selection of Skip Schweiss as 2020 president-elect, and why they did not sue the SEC to stop the implementation of Reg BI but may yet file an amicus brief alongside an existing suit.
The 11 chapters selected for the test, some of which are the FPA’s largest state chapters, including those in New York, Colorado and Greater Kansas City, represent 25% of the FPA’s membership, said FPA President Evelyn Zohlen. The FPA has 85 chapters and about 21,000 members.
The association has a list of more than 40 performance indicators to track during the two-year test, said President-elect Martin Seay. The OneFPA Advisory Council will look to identify what works best as they adopt the standardized processes. The executive at each chapter will become an FPA staff member and undergo the standard training that every FPA staff member goes through.
Feedback on those key performance metrics will be shared as they are gathered, and participants will share their experience with the test in a dedicated portal. “The whole point is to create a better member experience. If it’s not working, let’s change it,” said Zohlen.
The idea, said FPA Executive Director and CEO Lauren Schadle, is “better communication between the national organization and what’s coming down the line. It’s one membership. It’s incumbent on the national headquarters to understand what’s happening at the chapters, and vice-versa.”
A move to “centralize” the FPA by eliminating the independent chapters in favor of a national structure was abandoned earlier this year after some chapters rejected the plan. “It was never the intent” to eliminate regional chapters “and it’s not even a concern,” said Schadle. “Give us a year and people will see.”
As for Reg BI, which is widely seen to weaken the standards for RIAs and muddy the waters between financial planners and brokers, Zohlen said, “It’s not at all what we hoped we would see. But now that it’s here, we have a whole different animal to deal with.”
A suit would have had to have been filed in the 60 days between the publication of the rule and its stated implementation and “that was not long enough to determine the impact a move like that would have on the members,” Zohlen said.
The association will decide whether to file an amicus brief alongside an existing lawsuit in the next few weeks, Zohlen said.
The leaders also addressed the controversy around its election of Skip Schweiss, the president of TD Ameritrade Trust Company, as its 2020 president-elect.
Schweiss, who is not a financial planner and has not earned the CFP designation, will be the first president to come from an industry vendor. TDAI is a sponsor of the FPA, even as the two organizations differ in their advocacy around regulatory issues. Michael Kitces, co-founder of the XYPN advisor network, argued that it would not be possible to navigate the inevitable conflicts of interest, regardless of how much good will is brought to the effort.
Candidates for the position self-nominate, and Schweiss did so after talking with executives at TDAI about the integrity of the role, Zohlen said. The FPA board knew there would be questions around the selection, as did Schweiss. “Conflicts of interest exist, it’s real,” but, she said, the board was confident they will recognize them when they arrive, and they have a process to deal with them.
Zohlen said as the financial planning profession evolves and transitions away from solo or small practitioners to opportunities for CFPs in larger enterprises and as employees of national registered investment advisors, it made sense to widen the scope of the volunteer leaders to include different types of businesses.
“We’re for the profession of financial planning being built on the backs of CFP practitioners,” she said, “but it won’t be built just by CFPs.”