Hey, wasn't that somebody who used to work at the Stanger Register in those olden days when it was evaluating tax shelter deal terms? What was it that was so familiar? One morning, "exhibitor presentations" told us how to sell the speaker's products - including (here they were again) non-traded REITs. An author was signing books about the value of indexed annuities in client portfolios. Top producers at Ameriprise Financial gave us the secrets of their success. A company called First Command had a presentation titled, "Selling Effectively to Women." Wasn't that the same organization that paid a big fine to the SEC some years back and promised to stop deceptive sales practices to members of the military?
I winced every time I heard people call this an "industry" rather than a "profession." Suddenly, I connected with the oddly familiar feeling. Lavish booths, limited partnerships, cozy vendor/association relationships, industry rather than profession - had I wandered into a time warp? This was the International Association for Financial Planning all over again! If a tax shelter salesman from the late 1980s were transported to the FPA convention of 2011, he might have felt right at home.
As it happens, I spent almost nine years of my life working at the IAFP, and have many fond memories. But when the FPA was formed out of the IAFP and the Institute of Certified Financial Planners, this is exactly what was not envisioned. The framers of the merger had a profession-centric vision. The deal stipulated that, within a set period of time, you would have to earn the CFP designation to enjoy full membership. A lot of us thought this would be the end of those cozy wink-wink, nod-nod relationships between the trade organization and the product vendors.
As the merger was put up for a vote, a number of advisors on the ICFP side predicted exactly the outcome I was seeing in San Diego. I remember the late Henry Montgomery invoking what he called "the golden rule" as he prophesied the slow death of the professional association culture. "Those who have the gold end up making the rules," the Kemp Fain Award winner told me. As Montgomery wondered, when the doors are open to everybody and their dog (a sly reference to the fact that a dog was briefly a dues-paying member of the IAFP), then what does an organization really stand for?
A lot of former ICFP members are still experiencing a sense of loss, and the FPA has developed a slow leak in membership. How did this happen? It seems clear the vision of a succession of FPA boards has not wavered from that original profession-centric ideal, which was strongly articulated, once again, in the conference's opening speech by outgoing president Marty Kurtz.
I think there have been two problems. However loudly and often its leaders say the FPA is all about strong values, the reality in a trade organization is that the doors are open to anybody and nobody is monitoring members' behavior. When you sit at a chapter meeting next to that embarrassing fellow who's repeatedly been in regulatory trouble, or the sales team that sells the heck out of equity-indexed annuities with huge surrender charges, or when you know one of the sponsors is a company that got in trouble for deceptive selling practices to our soldiers, then that trumps the whole values discussion. It makes you feel like FPA membership really doesn't mean anything important.
The half-measures have only made this problem worse. When the FPA says only CFP professionals can participate in its referral program, that does nothing to appease the former ICFP-ers, while it alienates the non-CFP audience.
FUMBLING THE BALL
A more serious problem has been execution at the staff level. An association basically has two value propositions: passion and benefits. Trade associations, by their nature, have trouble exciting the passions of their members, but they can make up for it by aggregating the dues of their members and using that money to deliver valuable practice-enhancing services no single member could afford on her own. In this area, I think the FPA has fallen apart.