FPA slows — and could halt — its chapter rollup initiative

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Not only is the FPA slowing the integration process of its ambitious OneFPA program, but it could scrap the plan altogether if member comments and planned beta tests indicate it seems unworkable, according to FPA President Evelyn Zohlen.

Last year’s dramatic proposal to roll up all 86 of its chapters, plus two state councils in California and Florida, into one legal entity was succinct to the point of blitheness, accompanied by scant input from chapters and fast-tracked for implementation — to the perplexity of some. It was originally proposed to take place in barely over a year, by 2020.

You have nothing to fear, one FPA leader reassured chapter leaders at the time.

To some, the plan was seemingly unilaterally conceived out of the FPA's Denver headquarters, which did not go over well with many large, long-established and functionally autonomous chapters around the country.

"Local chapters are concerned about not having much of a say anymore about their chapters after the nationalization," says Danqin "Kristin" Fang, a CFP with Evensky & Katz/Foldes Financial Wealth Management in Coral Gables, Florida, and a member of her local FPA chapter in Miami.

In response, this week the FPA announced it is slowing the integration process to obtain greater input from members and to run beta tests with volunteer chapters. If these measures ultimately indicate integration is ill-advised, the whole concept could be abandoned, Zohlen told Financial Planning in an interview.

"Our ultimate goal is to create a kick-ass membership association that elevates our members and the profession," Zohlen said. "But if it turns out that, from the feedback from our leaders or our members, that it's not the right course or, through testing, that, 'Well, that was a noble idea that won't work,' then we will set that down and we will move on."

For now the FPA has abandoned plans to roll up all chapters into one legal entity, a cornerstone of the original plan. "It doesn't feel comfortable relinquishing our separate legal entities at this time," Zohlen says.

Between now and May 30, the association has opened up a comment period to gather more feedback.

Response to the FPA's first proposal was scathing from some quarters. Bob Veres, publisher of Inside Information and a Financial Planning columnist, wondered if the chapters would be better off seceding from the national body as chapters drive the greatest value for members. Michael Kitces, co-founder of XY Planning Network, suggested chapters could donate all their funds to other nonprofits in lieu of having them appropriated by Denver. Kitces is also a Financial Planning contributor.

"How many consecutive years must the FPA fail to grow before the national board in its fiduciary role acknowledges that just maybe the chapters aren’t to blame, but leadership is?" Kitces asked in a column. He pointed out that while other industry nonprofits have steadily grown their membership, the current FPA leadership has overseen a decline: Numbers have dropped to 23,000 today from from 28,000 in 2007, according to FPA spokesman Ben Lewis.

Concerns about a rollup were further stoked by the FPA's unprecedented decision last year to suddenly dissolve its relationship with the FPA of New York — arguably its highest-profile chapter — and create a replacement chapter, wholly controlled out of Denver. The move followed allegations of fiduciary breaches by that chapter's leadership.

A better-integrated FPA leadership nationwide, Zohlen says, would help avert a repeat of the kinds of problems that beset New York. Furthermore, she says, the right integration process — with the full support of chapters — would help the FPA increase its membership.

That's a job that has to be undertaken at both the national and local levels, Zohlen says.


FPA national has been in communication with Kitces and Veres since they launched their critiques, Zohlen says.

"Our stakeholders, including Michael and Bob, are very passionate about our profession and, in both of their ways, they care immensely about financial planners having a strong and thriving membership represent them in their work," she says.

Zohlen points out that, during a recently concluded four-month "listening tour," in which 90% of chapters participated, "I did not even once have a chapter leader suggest seceding or donating chapter funds."

That said, the controversy got people talking about transforming the FPA, which has been positive, according to Zohlen.

The FPA wants up to 10 chapters to volunteer to participate in an integration beta test, set to start Jan. 1. For a two-year period, the chapters would experiment with turning different functions over to the national office in return for certain benefits. "We may have centralized staffing," Zohlen says, with "chapter executives being employees of FPA, with performance still being controlled by the chapters."

There's a lot to consider, says Fang, who attended the November chapter leaders conference in Denver, when the first version of OneFPA was announced.

"The challenge," she says, "is that each local chapter has developed disproportional partnership relationships with various companies in the industry." Given that, Fang wonders, how would a national rollup impact those alliances?

Tailored solutions

Though improved technological tools and streamlined operational functions could benefit chapters, some chapter leaders wonder if the national body would be able to manage them effectively, Fang says. For one thing, chapters' computer systems are "tailored and customized to their own chapter needs and characteristics."

For integration to work, FPA's national body "has to provide a crystal clear structured vision and roadmap" for the chapters to support the plan, Fang says.

That, says Zohlen, is what FPA plans to create via its slower plan.

"The intent is absolutely not to do some diametric power shift to national, but to unite us more on the path that we are walking," Zohlen says.

In reviewing the new OneFPA changes, Veres wrote in his most recent blog post: "In general, I think this is a much better proposal than the initial one and I also think this time around the FPA is being much more transparent about what it’s trying to do." But given the FPA’s historical eagerness to push chapters to relinquish their independence, he writes that local chapters should continue to be skeptical and vigilant about the national office’s “vast, ambitious and slightly creepy overreach.”

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