FPA's Slump Is In Contrast To Schwab Conference's Record Attendance, Highlighting The Shifting Sands Of The Financial Advice Profession

Thursday, November 03, 2011 14:25
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FPA's Slump Is In Contrast To Schwab Conference's Record Attendance, Highlighting The Shifting Sands Of The Financial Advice Profession

Tags: financial planning

 

 
With Schwab’s IMPACT conference drawing a record 4,000 attendees, the shifting landscape of the profession is unfolding before us: The Financial Planning Association Experience in September attracted about half as many attendees as did the Schwab conference this year.  

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In years past, the FPA annual meeting attracted about as many attendees as the Schwab IMPACT.  Clearly, something has changed.
 
While some excused the light attendance at the FPA meeting by blaming market volatility and the pressure on advisor fees because of the financial crisis, these issues did not hamper the Schwab conference.
 
Earlier this year, I wrote about a slide in FPA membership and I’ve speculated that the advent of social media has allowed financial advisors to come together virtually, which perhaps has hurt FPA membership. But the success of Schwab’s conference, despite these trends, indicates something else is hurting the organization.
 
Yesterday Advisors4Advisors reported that the Financial Services Institute has experienced continued growth, and now has 31,500 members. Ironically, FSI, which now has more than the 24,000 members in FPA, is a spinoff of the broker/dealer division of the FPA. Meanwhile, Investment Management Consultants Association is experiencing continued growth in its ranks, according to IMCA CEO Sean Walters.
 
The advisory profession is changing and FPA has stumbled. Do you think FPA has made some mistakes? Is letting down advisors? How can it get back on track?
 

 

Comments (10)

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williamp707
I cannot say whether FPA has stumbled overall. For 2011, I decided to attend FPA Retreat instead of the annual conference. I wanted to attend a different FPA event this year and thought Retreat was incredible.

Next year, I have planned for both.
williamp707 , November 04, 2011
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agluck
Schwab IMPACT and the annual FPA annual meeting had about the same number of attendees until the last few years. Schwab this year had double the number of attendees of FPA. This does not mean FPA is not providing its members with helpful programs. But FPA's strength relative to other advisor groups has declined.
agluck , November 05, 2011
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jalfonso
It seems that FPA's efforts to back the fiduciary standard has caused the BD guys to leave and join organizations that do not advocate this higher standard of care. No surprise here and it reflects the reality that this industry is still primarily a sales-driven one. There is nothing wrong with selling financial products per se; the FPA, NAPFA and the CFP Board are just starting to insist that advisors make it clear to clients what role they are acting in, salesman or fiduciary advisor, so that the client can make an informed choice about who to hire. Rather than indicate any shift in the profession, the membership trend pointed out here just reflects the fact that this industry is still dominated by BDs and wirehouses. No news here.
jalfonso , November 05, 2011
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agluck
The question is whether the split between Financial Planning Coalition and commissioned advisors sets back the movement to make financial advising a profession. I think it is a setback to the professional movement.
agluck , November 06, 2011
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jalfonso
I don't see it that way. You cannot have a true profession unless members are held to a high standard of care. If the BDs and wirehouses will not or cannot adhere to this standard, watering it down does nothing to promote the goal of creating a true profession.
jalfonso , November 07, 2011
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agluck
You're saying an advisor who accepts with commissions cannot be a professional, and I disagree with that. Advisors who accept sales commissions but otherwise meet professionals standards fill an important niche in the marketplace. Moreover, mode of compensation is not an accurate measure in a professional standard of care. much less the key measure of professionalism. But I appreciate your putting yourself out there because airing the issue is important.
agluck , November 07, 2011
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nefthemis
This will gradually be decided by the marketplace as advisors and consumers continue to flee captive agencies looking for a higher level of service, care, and objectivity.
nefthemis , November 08, 2011
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jalfonso
All I am saying is that if one is acting primarily as a salesperson they should be clear about that to the prospect so that the prospect can make an informed decision about engaging or not. The current opaque state of affairs does the public a disservice.

As for what being a professional entails, I definitely believe a high duty of care is a key element. Would you want your doctor's compensation based in whole or in part on the drugs they prescribe to you?
jalfonso , November 09, 2011
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agluck
Doctors have an incentive to pad bills with unnecessary procedures. Please do not hold our doctors' compensation scheme as exemplary. More important, fee-only advisors are also selling something, and that should be made clear as well. I agree that fee-only advisors have fewer ways to gouge clients, but the difference between tge two modes of compensation is simply not black and white. An advisor's intent to behave with integrity is the key variable in this equation.
agluck , November 09, 2011
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jalfonso
My point, and I will end with this, is that a true profession holds its members to educational, ethical and professional standards. Those professionals are compensated for their expertise and advice, not for selling products. If a doctor, lawyer, accountant, etc., decides to violate the principles of their profession, there are mechanisms in place to discipline them. Folks who work for firms run to make a profit owe their primary duty to the firm. Clients entrusting their financial future to someone deserve to know that person is acting in their best interests.
jalfonso , November 09, 2011

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