Right in the middle of last years National Association of Insurance and Financial Advisors annual meeting, the country was devastated by the attacks of September 11. Instead of the celebration and positive reinforcement usually associated with it, the meeting ended on a confusing and sorrowful note.
“Overall, it was a tough year,” said Robert “Bob” Nelson, president of NAIFA, in an interview. Following last years meeting in Salt Lake City, NAIFA–along with the rest of the country–felt the squeeze of a tightening economy, turbulent markets, and a poor advertising environment.
In January, advertising revenue from NAIFAs members-only magazine, Advisor Today, was down over $1 million, according to Paul Smith Sr., treasurer of NAIFA, speaking from the podium. This, in addition to a drop in membership, a $1.1 million budget cut mandated by the finance committee, and news that the Million Dollar Round Table was no longer going to require NAIFA membership for its members, resulted in a proposed increase in membership dues and a reduction in staff.
“NAIFA is in a cash crunch,” Smith said.
Delegates at the meeting approved a $25, or 21.55%, increase in NAIFA membership dues. The current dues of $116 a year will go up to $141 a year, said a NAIFA spokesman.
This increase is set to be in place for only two years, the spokesman said, after which time it may be dropped.
Looking at membership levels, Smith explained that in January membership was 3% above budget, but slipped in April and May to end up with approximately a 4% drop.
And with MDRTs decision to change its membership requirements, Nelson is expecting some additional attrition in NAIFA membership.
Steve Bowlds, a member from Tulsa, Oklahoma agreed. “What MDRT is doing is going to hurt the association; some members just joined NAIFA to qualify for MDRT.”
Bowlds, an agent for 20 years, admitted that he initially joined NAIFA to qualify for MDRT, but now he is a delegate for his chapter.
However, in an effort to dispel these beliefs, MDRT has pledged to work with NAIFAs special programs to guarantee that the attrition doesnt happen, Nelson said.
“Theyre [MDRT] putting money and resources, including people and programs, in place to do more than they had ever done before in promoting NAIFA membership,” said Nelson.
One bright spot Nelson pointed out was that the political action committee “has for a third year in a row set a record level of fundraising.”