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NAIFA CEO Kevin Mayeux: There's "no limit to what we can achieve"

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In a wide-ranging interview with LifeHealthPro in advance of the 2015 annual conference of the National Association of Insurance and Financial Advisors, taking placing in New Orleans October 3-5, NAIFA’s new CEO Kevin Mayeux outlined advocacy and professional development initiatives underway at the 126-year-old organization.

Chief among them: NAIFA’s full-court press against the Department of Labor’s proposed fiduciary rule; a pilot project to let unaffiliated producers test-drive membership; and a study being spearheaded to identify to new professional development programs. Here’s a recap of the conversation with LifeHealthPro Senior Editor Warren S. Hersch.

Hersch: As NAIFA celebrates its 126th anniversary this year, how would you assess the state of NAIFA in terms of its financial health, standing in the industry and ability to advance advocacy and professional development objectives?

Mayeux: We’re doing our best to trim the fat out of NAIFA’s budget, control costs and reduce expenses. But we have a definite need to increase revenue.

To that end, we’re exploring new ways to grow membership so we can bring in revenue through member dues. In addition, we’re looking to expand program offerings by enhancing our training line and by seeking additional corporate partnerships and sponsorships.

Hersch: You’ve outlined several items. Can you provide more details on any?

Mayeux: Our membership target for the year is 43,000. We intend to reach this goal by signing up dues-paying paid members and through an introductory program we launched in the spring of this year. The initiative offers agents and advisors who have been in the business for one to three years the opportunity to try out NAIFA membership, see our value proposition and then join as full dues-paying members.

Since the launch, some 6,000 producers have signed on to participate; we believe we can convert a good percentage of them to dues-paying members. Also, some 44 states are now participating in the pilot program. We’re very pleased with these results.

In addition, we’ve done two things on the non-dues revenue front: First, we launched a study in conjunction with a Chicago-based organization, Association Laboratory, to do an in-depth analysis of the training needs of insurance and financial advisors; compare NAIFA’s offerings with those of others in the field; and then do a gap analysis.

So if there are needs that are not being met or not being met thoroughly, and if NAIFA can provide the additional skills training, the then the analysis, to be completed in December, will identify opportunities for us to add to professional development offerings and boost revenue.

In addition, we’ve repositioned our corporate outreach team, which used to reside in our membership department, to focus more on business development and strategic partnerships. In tandem with this change, we’ve hired a new vice president for business development and strategic partnerships.

He and his team will be reaching out to companies to make sure they clearly understand the value proposition of NAIFA, ascertain their needs, help to marry NAIFA’s existing products and services with those needs, and develop additional revenue-enhancing offerings that are high in demand among companies.

Hersch: Which regulatory issues are top of mind now for NAIFA’s leadership team?

Mayeux: The first one is the Department of Labor’s proposed fiduciary rule, which can have a hugely negative impact on NAIFA members and their clients in the retirement space. The rule is unworkable and cumbersome. And it will prevent many mainstream Americans from getting advice on our members’ products and services.

So we’ve been actively engaged in relaying our concerns to [DOL] Secretary Perez and his team and, on Capitol Hill, to members of Congress. I’m pleased to report that so far we’ve seen good bipartisan traction in getting members of both parties to write to the DOL and encourage them to either take all of the industry’s comments into account before they finalize that rule, and/or introduce legislation that will sidetrack the rule, either by requiring the SEC to issue a fiduciary standard or more draconian measures, such as not funding the DOL if they intend to enforce the rule.

We’re working on a number of fronts to ensure that, if a proposal is implemented, it will be workable and one that will address the industry’s bottom-line concerns. Let’s be clear: We do want our members to act in their clients’ best interests, but the DOL proposal as now drafted imposes an undue burden on insurance and financial professionals.

Hersch: Turning to Capitol Hill, what legislative issues is NAIFA focused on?

Mayeux: We do have concerns about tax reform proposals that might adversely impact the tax treatment of the industry’s products. We’re also advocating modifications to the Affordable Care Act to make the law less burdensome on our members and clients.

Hersch: In respect to the DOL rule, the Financial Planning Association, which held its annual meeting in Boston last month, voiced fewer objections than NAIFA to the proposal. Do you fear that the FPA’s position, and those other associations more favorable to the proposal, is harmful because the industry is not presenting a united front?

Mayeux: Different organizations are welcome to express their opinions on this issue. While the proposal may not directly impact many of the FPA’s members, the vast majority of our members give advice to their clients on a commission basis.

There are so many lower to middle income Americans who simply cannot afford to pay a fee up-front to get financial advice. The way NAIFA members sell products and give advice — high-quality advice from a learned professional — makes it affordable to them.

Yes, it’s a shame that the industry doesn’t have a unified voice on this issue, but I think that’s because of the varying remuneration agreements that advisors with different business models have in place.

Hersch: Do you share industry concerns that, if the DOL proposal is implemented, that we’ll see a reduction in the distribution channel of agents and advisors, as happened in 2013 after U.K.’s Financial Conduct Authority banned commissions under its Retail Distribution Review regulatory regime?

Mayeux: Yes, the proposal certainly could have a chilling effect on the number of people who decide to offer our products to clients. What I think we’ll wind up seeing is more advisors focusing on fee-based products and tailoring their practices to the high-end of the consumer spectrum. That will mean that a lot of folks in the lower to middle markets won’t have access to good quality advice.

Hersch: What strategies will NAIFA be employing in the year ahead to secure its advocacy goals?

Mayeux: What we always do in relation to advocacy is to educate lawmakers about the real world impacts of their policy proposals. We make sure that our members are aware of the impacts and have them relay their concerns directly to their elected members of Congress.

A true strength of NAIFA is that we have members in all 435 Congressional districts and many of these folks have maintained ties with their members of Congress — both in the House and the Senate — since they were local officials. That breadth of connections helps us to get our message across much more effectively than we could otherwise.

In addition, we continue to coordinate our advocacy efforts with sister associations and coalition partners — ACLI, AALU, GAMA and others. And we continue to communicate to the public and our members through infographics, videos and weekly blog posts that clearly define what the issues are and how they might impact our members and their clients.

Hersch: How is NAIFA evolving to better meet the professional development needs of its members and to attract new members? What changes have internal changes yielded to date?

Mayeux: Two things we’ve launched recently will, we believe, really enhance our professional development offerings. One was the July 1 [2015] relaunch of the LUTCF program, which we’ve spearheaded in partnership with the College for Financial Planning.

The whole curriculum has been upgraded and energized to help young and new advisors succeed as industry professionals. The dynamic curriculum builds on sales fundamentals, but also provides practical tips and tricks that can help members better understand their roles as advisors, the nuances of the business, and grow their client base.

The other initiative, launched in conjunction with the GAMA International Foundation, was the creation of our Advisor 2020 Workshops. These aim to help advisors grow their businesses and prepare their practices to meet the needs of the marketplace over the next five years.

To date, we’ve secured approval to offer the workshops for continuing education credits in 15 states — and more are on the way.

In addition, we plan to announce in early 2016 additional courses we’ll be on-boarding in connection with the Association Laboratories study I referenced earlier.

Hersch: In respect to the 2020 workshops, how might advisors have to evolve their practices in coming years?

Mayeux: American society is changing. There are more non-traditional families and the population is more ethnically diverse. We’re also seeing longer life expectancies, as well as improved technology to allow people to communicate faster and more efficiently than ever before.

All of these are changing the ways that Americans do business. We need to ensure that advisors stay on top of those trends and can address clients’ preferred ways to stay connected, while also meeting the needs of a much more diverse marketplace.

Hersch: Can you speak to the skills, insights and learnings you gained in your last position as vice president of the Institute of Internal Auditors, as well as other prior experience that might help to inform your current work at NAIFA?

Mayeux: I’m an association professional. NAIFA is the fourth association I’ve served during the past 18 1/2 years. What I learned at the IIA and at prior associations is that, in order for an organization to succeed, it has to be member-focused. That’s our first and foremost concern at NAIFA: making sure that we understand the needs of our members and that we’re delivering products and services that will enable them to be successful in their careers.

At the same time, we have to be fiscally responsible. So as our members’ needs increase, we have to develop the financial resources necessary to meet them. That’s why we’re expanding training and business developments programs that can offer new sources of non-dues revenue.

These are main-takeaways from my prior experience. At each of the associations I’ve run, we’ve operated the organization squarely in the black. And we’ve grown membership — in many cases, to an all-time high. I fully intend, with the dedicated team of staff and volunteers at NAIFA, to see the same thing happen here.

Hersch: How have developments buffeting product distribution in recent years — the aging of the advisor workforce, a perceived disinclination among millennials to join professional associations, and the growth of the independent advisor channel — impacted NAIFA’s ability to grow the organization? How are you addressing these challenges?

Mayeux: The aging of the field force — most advisors are in their mid-50s — is definitely a concern. Our industry offers a career that can be very rewarding, both financially and emotionally. We have to find ways to tell this compelling story and encourage talented young professionals to enter the business.

As to millennials, they learn in a lot of different ways. Based on preliminary data from the Association Laboratory study, millennial respondents are saying they want face-to-face training — but not just face-to-face training. They also want the convenience of having some training and professional development content be delivered online.

They also want an opportunity to get together from time to time to compare notes, share ideas and connect with fellow professionals. So we have to find a way to repackage what we do and deliver content in ways that our members — our clients — are consuming that knowledge.

NAIFA enjoys a challenge. I’m optimistic that if we can get everyone on the same page, that there’s no limit to what we can achieve. 

See also:

Taking stock of the DOL’s fiduciary rule proposal

Global regulations: The vise on agents and advisors tightens