A NAPFA membership rule change has provoked criticism for the way the decision was reached and communicated.

In a set of changes that took place Monday, the organization changed its membership requirements and eliminated its “provisional” membership status -- effectively changing the status of 17 of its members.

“In an effort to clarify our membership categories and ensure that each of our members are receiving the appropriate benefits suited to their experience level,” NAPFA national chairwoman Lauren Locker said in a statement posted on a NAPFA message board Tuesday, “the NAPFA National Board has decided to consolidate our Provisional membership role into that of NAPFA Affiliates.”

The 17 members whose status changed were informed by email Monday of their change in status from provisional to affiliate, the organization says. Those members will no longer be included in NAPFA’s “Find An Advisor” referral system -- one of the organization’s most valuable benefits.

The status change is “cosmetic,” NAPFA chief executive Geoff Brown said in an interview Wednesday, although he acknowledged it could cause “some discomfort” to members who are affected. The provisional status was considered a “stepping stone to becoming a NAPFA-registered financial advisor,” he explained. “That pathway doesn’t change. It’s being consolidated with the affiliate role.”

The fee-only group has approximately 2,400 members.


Some advisors were upset with the way NAPFA handled the change, voicing criticism on their Twitter feeds.

“I can understand NAPFA’s rationale for tightening membership standards,” said Brent Perry, founder of Piedmont Financial Advisors in Indianapolis, who is also a CFP and a member of the Alliance of Cambridge Advisors. “But there was no prior notice, no discussion and no prior communication to all members -- particularly not to the members who were affected.”

Perry was not affected by the status change.

"This wasn't an attempt to get rid of any professional that wants to do fee-only planning," said Linda Leitz, incoming NAPFA chairwoman and co-owner of It's Not Just Money, a planning firm in Colorado Springs. "It's just part of moving toward having well-defined membership categories."

Meanwhile, Brown said the NAPFA board “is not ignoring the feedback,” and would take the criticisms to heart. “You can always overcommunicate.”
NAPFA did not announce the rule changes on its website, although the membership section has been updated to reflect the current categories.


NAPFA also made changes to its experience requirements. “The requirement for NAPFA-registered financial advisors has been updated to match the experience requirements for CFP certification,” Locker said in her statement on Tuesday.  “This means that members may become NAPFA-registered financial advisors once they have acquired their CFP (achievable by passing the CFP exam and obtaining three years of professional or two years of client interfacing experience).”

The move was meant to align NAPFA and CFP requirements, Brown explained.

“We are reducing all renewal dues to the discounted rate offered to Financial Services Affiliates and will be refunding members who have already paid at the Provisional rate," Locker said in her statement. Members who were on a committee or region board as a Provisional member will be permitted to maintain their position as a NAPFA affiliate, Locker continued. Members who choose not to be NAPFA Affiliates will be refund their membership renewals.

“Members will be contacted directly to discuss the implications of this change and their options going forward,” Locker said.

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