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FPA’s Advocacy Push: States Today, Capitol Hill Tomorrow

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The Financial Planning Association has 23,700 members, its retention rate among its certified financial planner members is 89% (CFPs comprise 69% of FPA members), and “our message is resonating” with financial planners, Executive Director Lauren Schadle said.

Of its members, 36% are fee only, while 47% are compensated by fees and commissions, numbers which reflect FPA’s  “compensation neutral” stance, said current President Ed Gjertsen. Where FPA is far from neutral is in its embrace of the CFP designation and its consistent call for a fiduciary standard for all advice givers.

Schadle, Gjertsen and 2015 FPA Chairwoman Janet Stanzak spoke of the FPA’s membership and priorities, on both the local and national level, in an interview at ThinkAdvisor’s offices in New York on Wednesday. Expanding on the membership numbers, Stanzak pointed out that FPA has more than 2,000 members in its NextGen division, of which 33% are women, while Gjertsen pointed out that while many people just think of FPA as a national organization, “we have 93 chapters” across the country. In his home state of Illinois, the local chapter holds 40 events a year, Gjertsen said, driven on the local level, as on the national, by “passionate volunteerism” among its members.

Members from 57 different FPA chapters are participating in FPA State Advocacy Days in state legislatures across the country from February through early June in the runup to FPA’s second annual Advocacy Day in the nation’s capital on June 24. State advocacy efforts were made possible in part by the training and experience that FPA members received in the inaugural Advocacy Day last year, the Association’s leadership team said; participants in the June 24 Day (FPA members will be paying their own way to Washington, Gjertsen pointed out) will participate in a training program before this year’s event.

Gjertsen said the FPA likes to say “we’re the voice of reason” in discussions with policy makers and lawmakers. By “not screaming about compensation,” for instance, he said “we get traction with that approach.” He says “we’re seen as a valued resource” among lawmakers in Washington, who were taken aback when “we told them we want to be regulated more and are willing to pay for it,” referring to efforts to have the Securities and Exchange Commission conduct more exams of RIAs and to accept user fees to pay for those additional exams and help ease the SEC’s budget strictures.

Gjertsen said that “since Karen Nystrom has come in, our advocacy efforts have gone up a hundred-fold,” referring to FPA Advocacy Director Nystrom, the former congressional aide and National Association of Personal Financial Advisors advocacy director who joined FPA in July 2013.

As an example of FPA’s local advocacy, Stanzak said “we got active early on” working to defeat state efforts to impose a tax on financial planning advice. In her home state of Minnesota, Stanzak reported that a large group of FPA members met with members of the state commerce secretary, which regulates advisors, including several examiners. She said those regulators are “struggling” in handling oversight of the many RIAs who were moved to state oversight from the SEC, and the FPA members received valuable “education on cybersecurity” in that meeting as well.

She also noted that the benefits of FPA chapters move up the ladder as well as down. “State advocacy groups repor to the national board,” she said, providing valuable input to the FPA Board as it sets national advocacy priorities and can mobilize resources on the local level. Having access to lawmakers and regulators on a regular basis not only allows FPA to influence issues currently in play, but “when something big bubbles up, we have access” to those policymakers. Advisors and Social Media; ‘Leading by Example’

As for additional projects, the FPA announced earlier this month that it was conducting a study on social media in a partnership with LinkedIn. The two-part study will explore the use by advisors, both FPA members and nonmembers, of social media in general and its usefulness as a tool to gain clients and grow their businesses.

The second part of the overall study, to be conducted jointly by the FPA Research and Practice Institute and Julie Littlechild’s new venture, If Not Now Research, will survey investors’ use of social media in finding and engaging financial planners.

Results of the study will be released during the LinkedIn FinanceConnect meeting in New York on May 7.

Speaking of the national membership and the national board, Gjertsen reported that 72% of members are male and 28% are female, but on the national board, “a majority of the Board is women.” In fact, he said FPA is “probably the most” diverse in terms of ethnicity and gender and sexual orientation of “any financial services” association leadership. As proof of that diversity, he mentioned two preconference meetings before FPA’s national conference in Boston this September: the Pride Planners will meet, along with AAAFA—the Association of African American Financial Advisors. Stanzak noted that there are 35 FPA student chapters, many of them “connected” to local FPA chapters, and that the incoming president of FPA NexGen is a “dynamic African-American woman.”

Gjertsen said the Board’s commitment to diversity is “not just talk, but leading by example,” and spoke of the importance of fostering the diversification of the financial planning community by “opening the door” of leadership.