As the National Association of Insurance and Financial Advisors (NAIFA) endeavors to rally its members this week to protect the industry’s interests in coming legislative battles, the association is facing a threat that could undermine its advocacy efforts: discord within its own ranks.
NAIFA President Robert Miller warned of the association’s internal troubles during the kick-off general session of the association’s annual career conference and annual meeting, being held in Las Vegas September 8-11.
“Given that NAIFA’s membership is a reflection of the national population, it is perhaps inevitable that attitudes creating so much discord across America have plunked themselves squarely in the middle of the debate on NAIFA’s future,” said Miller. “For example, the role of federal government in American Society is a highly charged topic.
“This is a very important topic for discussion in the general population and on the presidential campaign trail, but it has no place in discussions about NAIFA’s future,” he added. “NAIFA is your professional association, [one] that owes much of its prestige and influence to its national character. But today, the association is dealing with a level of mistrust that is not healthy, nor is it productive.”
While NAIFA’s visibility on Capitol Hill has “never been higher,” Miller noted that many of the association’s local chapters are having trouble filling board positions and getting members to attend local meetings. And some locals are “distrustful” of unsolicited advice from state and national offices of the NAIFA federation.
“The closing down of underperforming locals has reached epidemic levels, while the number of states associations unable to afford professional management staff is on the rise,” said Miller. “Some states and locals seem to gather hurricane force energy in stating their enmity direted at the national level.”
“One truth beyond reproach is that there is room for improvement in all areas of the NAIFA federation,” he added. “But this is not us [locals] versus them [national] class warfare, and it can never be painted like that.
Miller said the consequences of not speaking to Washington with one voice are “grave.” As in 1913, when NAIFA’s predecessor association, the National Association of Life Underwriters or NALU, helped to carve out an exemption for life insurance death benefits from the newly enacted federal income tax, NAIFA and sister associations are again facing threats to the tax-favored treatment of life insurance. Of particular concern is Congress’ pursuit of tax reform and efforts to pay down the national debt.
“The tax advantages that insurance products have enjoyed because of their unique nature are at risk,” said Miller. “And this risk is serious.
“No matter which political party members in this room belong to, there is one bandwagon you better get on today: the insurance party,” he added. “We are one signature away from extinction–just one.”
Miller said that NAIFA’s “value proposition”–the association’s advocacy initiatives at the federal and state levels, educational offerings, networking opportunities and other member benefits–has been demonstrated time and again in studies undertaken by the organization. But more is required to communicate this value proposition to state and local associations that are calling it into question.
“Ironically, at a time when our profile on Capitol Hill in Washington has never been higher and our opinions never more sought after, some quarters of the federation are questioning our relevance,” said Miller. “You should never do that.”
Miller said that improving the NAIFA federation requires asking difficult questions. Among them: Why local associations are struggling to hold meaningful meetings and meet financial obligations; why so many insurance and financial advisors who need NAIFA to protect their business are not yet members; and why more NAIFA members aren’t engaged in lobbying efforts on the industry’s behalf.
One fact that needs to be communicated more to members of Congress, Miller said, is the industry’s financial impact. He noted, for example, that life insurance products generate 20% of all long-term savings in the U.S. And the life insurance industry pays out $1.5 billion per day in death benefit proceeds–close to the $1.9 billion per day in benefits paid by Social Security.
“Is Congress going to tell us that we’re not important to the fabric of America?” Miller asked. “I don’t think so. Why are we not united with single-minded purpose in telling this story?
Miller noted that conflicts among the federal, state and local branches of the NAIFA federation are inevitable. But he pleaded with attendees to put aside their differences to achieve a united political front.
“Over the next couple of days, we’ll have a spirited debate to talk about what’s best for our association moving forward,” said Miller in closing. “That is good–don’t run from that.”But when we return our towns and cities on Tuesday, let’s do what we do best: meet with our legislators, serve our clients and spread the word to NAIFA members far-and-wide that our voices need to be heard thunderously on Capitol Hill. The industry is counting on us. This year is too important.”