Speaking in a private interview on the first day of the Financial Planning Association’s Experience 2013 conference, FPA CEO Lauren Schadle and President Michael Branham told of their goals accomplished and goals yet to be achieved. “Our investments in technology are underpinning what we’re doing,” said Schadle on Saturday in Orlando, but noted as well that “nothing will turn around in one year.”
It was a year ago that Schadle took over the reins of the FPA from the legendary Marv Tuttle, but Schadle was never an outsider to the FPA. Rather, she is in many ways the consummate insider, joining FPA’s predecessor organization the ICFP in 1996, and had been FPA’s associate executive director and COO from 1996 until she succeeded Tuttle in October 2012. Over the past year she has sharpened the focus of the FPA, bringing discipline and a strong business sense to the organization. In introducing Schadle later Saturday at the formal opening session of the conference, current FPA Chairman Paul Auslander lauded Schadle as “a voice of reason “ on the FPA’s board
As for the size of the FPA, Schadle said “membership is stable at 23,000” members, including what she called a “slight uptick” in CFPs who have renewed their membership.
Branham said that when it comes to advocacy, particularly in Washington, the FPA’s “voice is being heard.” As a member of the Financial Plannning Coalition, along with NAPFA and the CFP Board, Branham said that the coalition played a “major role in staving off the Bachus bill.” That was the legislation introduced last year by House Financial Services Committee Chairman Spencer Bachus (R-Ala.) that would have moved oversight of investment advisors from the SEC to another entity, most likely FINRA. FPA and its coalition and other partners, namely TD Ameritrade and the Investment Advisers Association (IAA), were successful at least in part, Branham said, by using the findings of a Boston Consulting Group study that questioned the cost and effectiveness savings of an advisor self-regulatory organization.
As for the fiduciary standards being considered by both the Department of Labor and the SEC, Branham wondered that in the case of DOL, “How can you comment on a rule that hasn’t been released?” while on the SEC’s part, FPA did respond in July to the Commission’s RFI on the fiduciary issue. Branham said that whatever fiduciary standard does come from the SEC “ought not to water it down” beyond the Advisers Act standard. In an ironic twist, Branham noted that Phyllis Borzi of the DOL was planning to speak at FPA Experience 2013, but the government shutdown forced her to change her travel plans.
When asked whether the lawsuit by the SEC against the Merrill Lynch Rule was a good move in hindsight, Branham was unapologetic. “The lawsuit was the catalyst for the fiduciary conversation” that the industry and the regulators are having now. While noting that “hope is not a strategy,” Branham did say he was “hopeful on a fiduciary standard.” Moreover, while the FPA expects there to be two distinct fiduciary rulings—“DOL and SEC must have different fiduciary standards,” Branham said, because of their different responsibilities and purviews—“but if you’re in compliance with one, Borzi has said in multiple public events that you’ll be in compliance with the other.”
FPA’s advocacy efforts take place in many other locales than Washington, Branham pointed out. “We’re the only organization,” he said, that focuses on such local advocacy on behalf of its members. As an example, he cited FPA’s role as the “conduit” that allowed member constituents to lobby legislators in Minnesota, Ohio and Michigan against bills that would have added a tax to certain financial services relationships.
When asked about the recent hiring of David Brand as FPA’s director of strategic operations, CEO Schadle noted that Brand has a “vast amount of organizational experience” that will be “critical for the transformation we’re going through.” Brand, who was executive director of the ICFP when Schadle joined that predecessor group to FPA in 1996, took a low profile in the interview befitting his recent hiring, but did say “they say you can’t come home again, but this is like an exquisite homecoming.”
As for the “major firms” portion of FPA Experience, which always takes place just before the main conference, Branham said it was a “smashing success.” He related how the organizer of the major firms conference, Tim Welsh of Nexus Strategy, recalled how at the first such gathering in 2005, “there were six people in a dark room in San Diego.” Eight years later, Branhams said “we now have 100 firms in the group.” While admitting that “we won’t always agree, we have great relationships with our major firm partners.”
Reiterating her previous statements that FPA can’t be all things to all people, Schadle said that in everything FPA does, it’s important that “we stay within our guidelines—what’ s in our perview. You could call it business discipline.”