Close Close

Financial Planning > Behavioral Finance

Birds of a Feather

Your article was successfully shared with the contacts you provided.

There’s a tendency among small businesspeople who share the same interests to come together for fellowship, networking, and to gain the economies of scale, for everything from software to marketing materials, that membership in a larger organization can provide. That’s certainly true of advisor associations. More than ever, though, the professional associations that cater to financial planners and investment advisors in all their iterations (see our annual directory that follows) are having a meaningful impact outside the planning community itself, among consumers, in the courts, and on Capitol Hill. Below are some thumbnail sketches of what some of the groups you may already belong to are planning in the months and years ahead.

National Association of Personal Financial Advisors

The National Association of Personal Financial Advisors (NAPFA) continues to be the voice of the fee-only financial advisor, insisting on fiduciary conduct and complete disclosure of all fees. “NAPFA is an interesting organization because even as far back as 1983, the group that formed the organization had a mission, and we’ve never veered from it in all these years,” notes CEO Ellen Turf. “We just came off of [the NAPFA Board's annual] strategic planning,” notes Turf, during which “we reaffirmed that we will stay the course, that the organization is strong, and that we will continue to see membership grow at 10% a year.”

In fact, membership has doubled in the last five years, Turf says. Projects NAPFA is working on include the “Focus on Fiduciary” campaign, designed to educate consumers about what it means to work with a fiduciary, and NAPFA University, which is a platform where an advisor can get education beyond that required to get a CFP. “We also started another project, called the MIX (Management Information Exchanges) group, which is a peer-to-peer support group,” says Turf. “That’s been highly successful; we now have 14 groups.” Groups have highly confidential face-to-face meetings twice a year, and then conference calls every month or every other month.

Investment Management Consultants Association

Founded in 1985 and headquartered in Denver, the Investment Management Consultants Association (IMCA) has more than 6,700 members, up 50% since 2003. Starting in September 2007, IMCA began offering a new designation–the Chartered Private Wealth Advisor. Candidates who attain the designation will gain an advanced expertise in the life cycle of wealth, including accumulating, preserving and protecting, and distributing it. “Over the past few years, we have been noticing that our members’ clients have been asking more complex and sophisticated questions,” says executive director Dede Pahl. “Now we’re moving into protecting and distributing wealth, as opposed to just accumulating wealth.” In 2008, IMCA will offer two Chartered Private Wealth Advisor programs at the University of Chicago Graduate School of Business “Then, we’ll launch it in a bigger way in about 18-24 months,” she adds. According to Pahl, the challenge for most advisors is staying on top of the information that they need to help their clients. “The sophistication of the investment market is moving rapidly, and so we are trying to provide our members with access to the most leading edge research and education as possible,” she says.

Financial Planning Association

As the largest advocacy and leadership group for the financial planning profession, the Financial Planning Association (FPA) has 28,300 members who agree to abide by its code of ethics, which stresses professionalism, integrity, competence, fair dealings with clients, and disclosure of conflicts of interest. Members benefit from the FPA’s strong voice in Washington, D.C., and ongoing education, professional development, and practice management guidance. Many FPA members hold the Certified Financial Planner designation. Nearly 3,000 FPA members from 27 countries (including the U.S.) attended the 2007 FPA Conference in Seattle in September.

The FPA has had a big year including its victory rolling back the broker/dealer exemption rule last spring. The association’s vision is to “create a world where everyone lives and prospers,” according to FPA President Nick Nicolette, “especially the public we serve.” Nicolette, who is a principal at Sterling Financial Planning in Sparta, New Jersey, will hand the FPA reins over to FPA President-elect Mark Johannessen on January 1. FPA is based in Denver, with an office in Washington D.C.

Financial Services Institute

Since it was formed in 2004 as the independent broker/dealer offshoot of the Financial Planning Association, the Financial Services Institute’s (FSI) agenda has been packed with political advocacy initiatives on behalf of the independent B/D community, providing regulators and lawmakers with a deeper understanding of what independent B/Ds are all about, as well as the differences between independent B/Ds and wirehouses or national firms that employ a captive broker sales force.

Dale Brown, FSI’s president and CEO, and board chairman John Simmers, who also has a full-time job as CEO of ING Advisors Network, have been forceful in efforts to ensure that independent broker/dealers have a strong voice and input on regulation covering 12b-1 fees, Reg. S-P, business gifts and entertainment, and the SEC’s RAND Study of investor perceptions. FSI, based in Atlanta, has 5,000 individual members, and 105 member firms with 128,000 affiliated registered representatives.