13 Concerns About FPA’s OneFPA Network Proposal: Does FPA Need “The New Chapters” Or “The New National” Instead?

(Michael’s Note: This is perhaps the hardest article I’ve ever had to write for the Nerd’s Eye View blog. For over 15 years, I’ve been a member and an active volunteer with the Financial Planning Association. I was a chapter Board member for 6 years, including serving as President. I’ve participated in and led numerous National conference committees and task forces, chaired two National conferences, served for over a decade on the Editorial Review Board of the Journal of Financial Planning, worked as a paid member of the FPA staff as the Practitioner Editor of the Journal of Financial Planning, and have spoken at more than 70 of our 86 chapters and every FPA National conference. And so I am, to say the least, a long-standing active supporter of the FPA. But as a loyal, active, and passionate member, I believe it’s crucial to step up and say something when I see the organization I love and have given so much to, potentially go astray. And so in this context, I share my deep concerns about the recent OneFPA Network proposal… not to tear the FPA down, but because I believe the FPA is such a vital organization for the financial planning profession that it would be a disservice to the profession to not share some constructive criticism about a dangerous proposal, and address the FPA’s elephants in the room.)

13 Deeply Concerning Problems With The OneFPA Network Proposal

The stated purpose of the OneFPA Network is to improve the alignment between and integration of FPA National and its chapters by consolidating what are now 86 independent chapters (and two state councils) into a single national FPA entity.

From an execution perspective, having a single national entity provides the FPA the opportunity to better centralize functionality in key operational and administrative areas, from accounting and finance to unified technology systems and more efficient execution of HR functions for various chapter executions and other chapter staff members. And in exchange for dissolving the individual FPA chapters as they exist today, the OneFPA Network would provide a new “Participatory Governance” structure where representatives from each of The New Chapters (TNCs) would participate on a new “OneFPA Council” that in turn would populate all the key FPA National decision-making committees.

However, while at a high level, the “consultant-speak” of creating a “more aligned and integrated” organization that can produce “more empowered leaders” through “centralized integration” overseen by “participatory governance” sound like laudable goals, the OneFPA Network as proposed includes a number of deeply concerning gaps and potential problems that raise serious concerns about the true focus and motivation for FPA consolidating its chapters in the first place.

Specifically, the key issues of concern regarding the new OneFPA Network proposal are:

1) Despite emphasizing a "participatory governance" system that will give chapters more control and input to National than they've had in the past, the proposed governing documents of the OneFPA Network specifically retain National-Board-appointed chairs, that can both set the agenda and retain a tie-breaking vote for National, on every committee that can impact chapter financial and other decisions. And notably, not every committee will have Board-controlled chairs... just the committees that would have purview to set policies that may change the allocation of dollars between National and its chapters. Which means the chapters would, in the truest sense, not be able to actually govern any key outcomes in the new participatory governance structure. Or stated more directly, National specifically structures the governance of the OneFPA Network to retain control over just the exact committees and task forces that actually matter the most.

2) Further emphasizing the limited nature of any real governance or power-sharing from National to the chapters under the OneFPA Network's "Participatory Governance" proposal, the governing documents also explicitly retain for National the right to alter or outright disband any committees, task forces, or even the entire OneFPA Council. Which means the TNCs truly have absolutely no real governance mechanism to ensure that they will have any continued role in FPA governance if there is a National-chapters dispute in the future.

3) Despite insisting that it is focused first-and-foremost on continuity for chapters, the OneFPA Network proposal bizarrely "forgot" to provide for any actual selection process for TNC leaders in the future (as their current boards will legally no longer exist after the chapters are dissolved)... notwithstanding the fact that the FPA National staff painstakingly created the structure, selection process, and (controlling) chair selection process for every key (National-controlled) decision-making committee in the future.

4) While National has maintained that chapters will retain control of their finances after being dissolved, in reality chapters actually will lose control of most of their key financial pillars. As under the OneFPA Network proposal, National-controlled committees will determine the policies that all chapters must adhere to when budgeting in the future (which could force chapters to use certain venues, only run certain types of events, or even make an "overhead cost allocation" of 10%, 20%, or more of their budgets to support National infrastructure), National-controlled committees will drive policies regarding how National/chapter sponsorships are negotiated and how the monies will be distributed (and the fact that it's even a question to be determined implies that chapters will not see the 100% of their local sponsorship revenues they currently receive), and FPA National has already acknowledged that the entire "chapter dues" assessment system may be restructured after the chapters are dissolved. Which means chapters may face a substantial restructuring of their chapter finances after National takes control of both key revenue sources (sponsorships and chapter dues assessments) and sets new policies regarding how budgets can be spent.

5) Chapters will also lose control of their oversight of their local chapter executives, as under the OneFPA Network proposal, FPA National will take "significant input" from TNCs but retain National control over the actual decisions to hire and fire chapter executives (in addition to determining whether or at what size a chapter should be permitted to have a chapter execution by setting such policies under the OneFPA Resource Coordination Committee).

6) Why does FPA National have such urgency in proposing the OneFPA Network with an effective date of barely 13 months away? As the saying goes... "Follow The Money." Because FPA National itself has made the case that the OneFPA Network is essential for the organization to survive and thrive in the future, but as it turns out that may not simply be about the operational efficiencies of more centralized chapters, but instead literally a state of financial distress for the organization. As since 2008 the FPA's conference sponsorship and Journal advertising revenues have crashed by nearly $4.5M per year. Which further raises serious concerns for chapters about how Nationally-negotiated National/chapter sponsorships will split that sponsorship revenue in the future, especially when National is facing such significant revenue declines and controls the decision-making process for how those dollars will be split for its own behalf. And what kinds of incentives or pressure the OneFPA Educational Committee will have to limit large chapter events like FPA NorCal or FPA Minnesota in the future to keep them from (further?) potentially cannibalizing FPA National's own national conference sponsorships.

7) FPA National maintains that transformational changes are necessary to navigate the current "landscape challenges" that modern associations face... yet in practice, NAPFA, IMCA (now IWI), and the AICPA PFP associations have all grown membership by more than 50% since their pre-financial-crisis highs (even as FPA has declined by 15%), and the CFP Board has added more new CFP certificants in the past 10 years alone (from 58,000 to 83,000) than the FPA has in total members (still under 24,000). Which raises the question of whether the FPA really needs The New Chapters, or if the problem is that the National organization simply cannot figure out the right strategy to execute growth even as financial planning, CFP certificants, and every other financial planning membership association grow around them?

8) Compounding the struggles of FPA National is the true elephant in the room: that the current leadership of FPA National has been largely responsible for growth and leadership of the organization since the 1990s, and the FPA has failed to grow at all for any of that time period. How many consecutive years does the FPA have to fail to grow under current leadership, before the National Board in its fiduciary role acknowledges that just maybe it’s not the chapters’ fault for FPA’s woes, but simply that the current leadership doesn’t know how to make the FPA succeed in the current environment... and that perhaps it's time for The New National (instead of The New Chapters)?

9) If FPA National believes that it can create better alignment and efficiencies with its new committee structures and investments into technology, then go ahead and make them without dissolving the chapters (as neither the OneFPA Council, new committee structures, or technology investments, require chapter dissolution to occur), prove that National can really execute superior systems, establish measurables and Key Performance Indicators to demonstrate that it's working, and create buy-in for chapters to want to dissolve down the road by actually showing the improved results. Rather than saying, "Trust us, give us all your money, we'll figure out later how it will all work out," which eliminates any organizational accountability (or chapter recourse) if National fails to execute in the end. (And recognizing that if National was so effective in execution, it could have already done all the initiatives it proposes!)

10) While the OneFPA Network proposal stipulates that chapters which fail to accede to the OneFPA Network by the end of 2019 will be dissolved and have their assets forfeited to National (per the existing chapter affiliation agreement), at least some chapters do have a viable Plan B option: to voluntarily donate their own excess reserves to a charitable entity (e.g., the Foundation for Financial Planning) rather than "contributing" them to National, or even to seed a new alternative chapter association that can re-affiliate itself to NAPFA, IMCA/IWI, or even the CFP Board. Alternatively, the largest Alliance Forum chapters in particular are large enough that their collective excess reserves could even seed a new alternative National association to the FPA. (Which would be unfortunate, but may nonetheless represent the final option of protest for chapters that don't buy into National's vision of the OneFPA Network.)

11) FPA National has stated that it is "listening" and open to feedback, but its actions have not at all been proactive to try to actually obtain stakeholder feedback. For instance, its "Listening Tour" has failed to announce any actual times, dates, and locations for the "Tour" (which as it turns out thus far is only available to be scheduled virtually and only available to chapter boards), the OneFPA Network proposal itself was only mentioned once in a single email to members in the past month (with no further explanations, solicitations for feedback, webinars, or the aforementioned Listening-Tour-that-isn't-touring), the original proposal would have required all FPA volunteers to be "Champions" of the new proposal (though that requirement was already eliminated due to volunteer objections), and National's decision to shift the employment status of all chapter executives to be employees of National (where National conducts the performance reviews and makes hiring/firing decisions) creates substantial future job risk for chapter executives who may object.

12) Better "alignment" to eliminate the "Us vs. Them" mentality of National vs. chapters was explicitly stated as a reason for the OneFPA Network, yet it's hard to see how the proposal does anything to improve the situation. As FPA National has effectively said, “We’re dissolving your chapter independence with a hard deadline that you have no choice about, and transferring all of your money to our bank account; trust us that we’ll decide how to allocate the money in a way that appropriately navigates our own $4.5M advertising, sponsorship, and events deficit, to be split in a way that you’re happy with. Subject to a Participatory Governance structure that you can be involved in... but in which we retain key control of all the financial decision-making committees.” Simply put, you don’t fix an “Us vs. Them” trust problem by engineering an aggressive takeover while saying, “trust us.” If you want chapters to acquiesce to your governance, try showing some execution that actually works first and then get the necessary buy-in.

13) At this point, FPA National needs to officially put a "pause" on the OneFPA Network, and use the intervening time to start implementing some of the key initiatives anyway (which don't actually require chapters to be dissolved and gives National a chance to prove itself), to figure out (and then speak more candidly) about how all the important details will really work, and to determine whether the current staff leadership are really the right people to carry the organization forward from here... especially if the National Board really believes that the OneFPA Network is the future of the organization and will now be compelled to delay due to a poorly executed rollout by staff in the first place.

Participatory Governance: You [TNCs] Can Participate In OUR [FPA HQ] Governance

One of the key tenets of the OneFPA Network proposal is that in exchange for chapters being dissolved as independent entities that previously had their own decision-making authority (albeit subject to their affiliation agreement with FPA National), that instead volunteer leaders of The New Chapters (TNCs) as reconstituted under National will have a “participatory governance” structure through the OneFPA Council.

Notably, though, while the FPA’s proposal document does state that “the participatory governance approach is a core element of the short and long-term success of the OneFPA Network, as it creates a sense of greater ownership for all leaders and increases leadership engagement, resulting in a model leaders are more likely to accept”… the OneFPA Council itself does not have any actual governance authority whatsoever.

Instead, the OneFPA Network proposal explicitly frames the OneFPA Council as a “strategic body that provides input,” while the FAQs section even more directly states that “the purpose of the Council is to act as a strategic sounding board and provide feedback at a high level,” but is not a decision-making body itself. That authority remains with FPA HQ (via its National Board).

And while the OneFPA Council does populate the key committees and task forces of the OneFPA Network – and the FPA National leadership has repeatedly emphasized that representation on OneFPA committees and task forces will be a 50/50 split of National Board representation and OneFPA Council representation – the leadership of those committees (including in most cases, any key tiebreaker vote in the event of a split decision between chapters and National) remains entirely under the authority of National.

Because, while representation on the key committees may remain 50/50, the Chair of the OneFPA Strategic Partnership Committee (which determines how sponsor dollars will be split with chapters), the Chair of the OneFPA Leadership Institute Committee (which sets the “training” agenda that all volunteers and leaders will be inculcated into), the Chair of the OneFPA Technology Task Force (which selects and oversees all the technology that chapters will be required to implement), and the Chair of the OneFPA Nominating Committee (which selects the proposed slate of new National Board members) are all themselves National Board members selected by the FPA President to lead those committees (and in the event of a split decision, cast the tie-breaking vote).

Similarly, the OneFPA Resource Coordination Committee (which determines whether chapters are implementing their budgets, “in accordance with the strategic priorities set [solely] by National”) is also chaired by a (tiebreaker) individual selected by the President of the National Board, as is the chair of the OneFPA Transition Task Force (which sets all the timing and implementation milestones and requirements for chapters to make the requisite changes!).

Notably, though, the OneFPA Education Committee (which is focused more on disseminating best practices out to chapters) and the OneFPA Finance Committee (which primarily provides finance reporting to the board and sets the investment policy of its reserves but does not have direct authority over chapters) have non-tiebreaker chairs selected directly from the committee membership itself.

In other words, the OneFPA committees are explicitly designed in a manner that ensures every committee which actually has decision-making authority over National has a Chair selected by National who can cast a tiebreaking vote in favor of National if there is ever a split between National and chapters. While the committees that don’t have such chapter oversight authority (and thus “don’t matter” as much for control purposes) have no such Board-appointed tiebreaker Chairs. Or stated more directly, National specifically structures the governance of the OneFPA Network to retain control over just the exact committees and task forces that actually matter the most.

Perhaps even more significant, though, is that the guiding documents also explicitly state that FPA HQ has reserved the right for its Board of Directors to “review annually which FPA HQ committees, councils, and task forces are required for the following year” (Section IV, Subsection C, paragraph 3 of the OneFPA Network proposal document). Which means the National Board also retains unfettered authority to simply disband, reconstitute, or otherwise change the rules and selection process for any Committees or Task Forces, or the entire OneFPA Council itself, without any approval from TNCs, the OneFPA Council itself, or the general membership, at any time in the future it wishes to. (Which is roughly akin to saying that Congress must ratify the actions of the President, but the President is given the right to disband Congress at any time and then proceed without Congressional approval in the future. In such a framework, what do you think would happen the next time Congress disagreed with the President on an important issue?)

Which means in the end that, while the stated purpose of the OneFPA Council’s participatory governance structure is to “create a sense of greater ownership for all leaders and increases leadership engagement, resulting in a model leaders are more likely to accept”… the participatory governance structure is explicitly designed in a manner that results in “ownership” in name only and not any actual ownership of key decisions that may matter in the future!

And ironically, while FPA National insists that the OneFPA Network is still focused on supporting its chapters first and foremost, the entire 27-page OneFPA Network proposal explains, in depth, how every Council, Committee, and Task Force will be composed (in a manner where National retains control), but forgets to include any explanation about how the 86 volunteer chapter leaders themselves will be selected in the future (after their chapter entities and existing bylaws are dissolved by National!)!

Chapters Truly Do Lose Control Of Their Finances

One of the other key tenets, along with “participatory governance,” that National has put forward in order to get chapters and their leaders on board with the OneFPA Network, is the idea that "chapters will retain control of their finances" so local leaders can still decide how to use their dollars to run their local events.

Thus, while technically and legally the dissolution of chapters into a single National organization must result in all assets being consolidated into a single national account, the OneFPA Network proposal explicitly states that individual chapter reserves will be placed into segregated program accounts for the TNCs, the OneFPA Resource Coordination Committee will be responsible for providing monthly accounting of (separate) income and expenses for each TNC, and TNCs will have “final determination and control over their budgets and their existing reserves.”

Except, in reality, TNCs will have far less control over their finances in the future. As while TNCs do retain authority over their segregated accounts, that authority is only “through coordination with the OneFPA Resource Coordination Committee.” TNCs will retain control of their own budgets only after being “reviewed by the OneFPA Resource Coordination Committee,” and the new Financial System Protocols explicitly state that “TNCs have final determination and control over their budget and their existing reserves… based on guidelines established by the OneFPA Resource Coordination Committee.”

In other words, chapters retain “complete” control over their finances… as long as they’re spending in a manner consistent with the articulated “best practices and guidelines” policies established by the OneFPA Resource Coordination Committee. (For which, as noted earlier, the National Board sets its own appointed chair with a tiebreaking vote in the event of any disputes.) Which means if the OneFPA Resource Coordination Committee sets guidelines that “two-day conferences are not deemed the best use of resources because they conflict with National's own lucrative conference events,” FPA Minnesota and FPA NorCal must disband their existing two-day events. And if the OneFPA Resource Coordination Committee determines that chapter meetings should only be held in a particular hotel chain or venue with which National has negotiated a certain deal, chapters must move their current meetings. And if the OneFPA Resource Coordination Committee determines that chapters should be required to run all their events with a 20% cost allocation for the overhead costs of the “support” services that National provides to the chapters (i.e., a National administrative fee for chapters), then chapters must cut their local expenses and shift more of their chapter resources to financially support more of the National infrastructure.

In fact, the latter in particular is a notable concern for which FPA National has an existing track record, as in the early days after NexGen was folded into FPA (after being founded as a separate entity), sponsorship dollars for NexGen events weren’t made fully available to NexGen, and instead were allocated against the National “overhead” expenses (i.e., cost accounting allocation of national staff salaries to NexGen support), resulting in National retaining the use of the bulk of NexGen’s sponsorship dollars for its own National staffing needs.

Furthermore, it’s not even clear how sponsorship dollars will actually flow to chapters in the future, as the OneFPA Network proposal explicitly states that “policies with respect to the relationships and contracts with corporate partners [i.e., sponsors]” will lie with the National committee, and that TNCs will have a “key role” with respect to local sponsorships but only “while coordination more nationally based relationships"… which means, in essence, that National is aiming to structure more sponsorships nationally rather than at the local level, and National will then determine how all sponsorship dollars are split between National and the chapters (as the FAQs explicitly state, “the OneFPA Strategic Partnerships Committee will assess and recommend the most effective approach to the strategic partnerships and how the monies get distributed”). Of course, it's entirely possible that the bulk of the sponsorship dollars will still be allocated to the chapters, but the fact that it's even a question of how the monies will get distributed when today 100% of a chapter's sponsorship dollars belong to the chapter highlights that chapters will likely receive less-than-100% of their sponsorship revenue in the future.

Similarly, the elimination of discrete chapters as independent entities and consolidation into a single national entity also threatens the existing allocation of “chapter assessments” – the additional local membership fee that chapters can assess to FPA members in their local geographic region in order to fund local operations. Because in the future, it’s not clear whether or how chapter assessments will be collected, as the OneFPA Network initiative explicitly states that “relevant OneFPA committees and the Board of Directors will explore and answer what to do about dues and local assessments, including… if assessments are [still] allowed and, if so, for what, and what portion of dues is allocated to TNCs.…”

In addition, the consolidation of staffing of chapter executives and other local chapter support staff into a single national entity means that chapters will no longer even have control over their own local chapter administrators. As again, while the FPA maintains that “compensation of TNC executives is handled by each TNC” and “TNC leaders will have the primary role in the performance evaluation and hiring processes,” ultimately the chapter’s ability to hire and set compensation for their own staff is still subject to review by the OneFPA Resource Coordination Committee. And in what appears to be anticipation of the potential for future disputes between National and TNCs, the FAQs explicitly state that “TNCs will have ‘significant input’ in evaluating staff” (i.e., not control but just ‘input’), and in the proposed Governance Manual under “TNC Obligations,” it is similarly stated that TNCs “will be involved in the hiring and performance review processes of TNC staff” (which again means they don’t ultimately control the hiring/firing processes).

Which means in the end, while National has insisted that “chapters maintain control of their finances,” in practice:

- Budgets and Operating Plans are set for review by the OneFPA Resource Coordination Committee (for which National specifically retains control through its appointed-Chair structure).

- National has the ability to set its own guidelines and best practices policies that TNCs must comply with (through the OneFPA Resource Coordination Committee) that allows National to override any chapter event or policy if it is deemed to fit National’s strategic goals to do so.

- National can set policies for cost allocations of National staff overhead against chapter finances, effectively compelling chapters to shift local revenue to fund National operations.

- National will control the allocation sponsorship dollars (the lifeblood of most chapters) with a stated intent of creating even more “National” sponsorships in lieu of chapter-level sponsorships (further shifting dollars to National), and retains the ability determine whether or how much of any sponsorship dollars will eventually come back to TNCs (again determined by a committee for which National specifically retains control through its appointed-Chair structure).

- National will set and determine whether or how much chapters receive in chapter assessments and dues-sharing from the National organization.

- National will retain control of chapter administrator employment status, approval of chapter administrator compensation (through the budget approval process), and the determination of whether a chapter can even have a local administrator or not (through both the hiring controls and the budget approval process).

In other words, of the three key pillars of revenue for a chapter – event income, sponsorships, and chapter dues assessments – National has not only taken direct control of two out of three and hasn’t even articulated the policies for whether or how much money chapters will receive, but it has also retained oversight control of the bulk of key cost components for chapters as well. Ultimately, the only thing that chapters largely retain control of is their local events (albeit still subject to the OneFPA Education Committee’s oversight to avoid “competition” with National) as TNCs essentially just become local educational program delivery groups.

And perhaps even more concerning is the fact that if chapters still manage to run profitable local events without as much support from their sponsorships and dues assessments, those event profits – termed “reserves that accrued after financial integration is achieved” – were under the original OneFPA Network proposal not subject to the control of the TNC at all, and instead would have been allocated according to a recommendation to be created by the OneFPA Finance Committee, OneFPA Resource Coordination Committee, and OneFPA Transition Task Force. Effectively ending the practice of many successful chapters of donating their excess reserves to organizations like the Foundation for Financial Planning and its pro bono financial planning services, and compelling them instead to reallocate their profits back to FPA HQ (or whatever else the FPA HQ Committees determine as appropriate). In a subsequent revision, the OneFPA Network proposal eliminated this provision... but only by grouping up "future" reserves alongside "existing" reserves as being subject to review and policies set by the OneFPA Resource Coordination Committee anyway, making the change a distinction without a difference anyway.

Which means in essence, not only do chapters lose control over their sponsorships and chapter assessment dues, but National has indicated a clear interest that it may handle their future positive cash flows differently as well. Which may really (just) leave chapters enough money necessary to (only) run local programs (or any other initiative… that the TNC gets OneFPA Resource Coordination Committee approval for first), while ceding the remainder of their finances (and control of those finances) to the strategic top-down goals of the FPA HQ National organization.

Why Does FPA Need Transformational Change? Follow The Money…

As soon as the FPA proposed its OneFPA Network initiative, some at least raised the question of why there needed to be so many changes, and why they had to be so drastic as to make a virtually irrevocable decision to dissolve a chapter system that has been in operation for nearly 50 years.

As the FPA itself puts it, “without a transformational change in the fundamental structure of FPA, we will not be able to withstand the landscape of challenges that are intensifying at a rapid pace” and that “FPA doesn’t have the resources in the financial planning landscape to survive and thrive given the current level of internal organizational separation.” In other words, the FPA itself is suggesting that the need for change is about more than just a matter of volunteer alignment, but the financial resources and survival of the organization itself – a concern about the long-term financial health of the FPA that has been raised previously on this blog as well.

The “good” news at least is that FPA’s recent membership challenges have largely stabilized, and after declining from over 28,000 members before the financial crisis to under 24,000 afterward, the organization has maintained itself in a channel between 22,000 and 24,000 members for the past ten years since 2009.

Yet when the FPA was first formed over 18 years ago in its merger of the IAFP and the ICFP, it was a combined organization of 30,000. Which means, despite the ongoing growth of CFP certificants – the stated focus of the FPA, per its own Bylaws that stipulate, “The thrust of FPA’s message to the public that… when seeking the advice of a financial planner, the planner should be a CFP licensee” and that “FPA will proactively advocate the legislative, regulatory, and other interests of financial planning and of CFP licensees” – the FPA has utterly failed to participate in any of the growth in CFP certificants since the IAFP/ICFP merger in 2000. As since that time, CFP certificants have grown from approximately 36,000 to 82,000, even as the FPA’s membership has declined from 30,000 to under 24,000. Which in turn has caused an even more dramatic crash in the FPA’s actual representation of CFP certificants themselves, falling from more than 50% of CFP certificants at the time of the merger to barely over 20% today.

And unfortunately, “just” looking at membership woes for the FPA may actually understate the organization’s financial challenges, as the ongoing shift of financial planning away from products and their commissions to getting paid for advice is adversely impacting the FPA’s finances even more than its membership (and membership dues) challenges!

As the chart below shows, FPA’s overall revenue as an organization has declined nearly 40% from its high leading up to the financial crisis, dropping from a peak of more than $16M/year to barely over $10M/year today. And the decline is not solely (or even primarily) driven by a decrease in Membership Dues (which ticked up in in the past two years due to the recent National dues increase), but instead by FPA’s other business lines – its various webinar and other product sales, and primarily by a substantial decrease in revenue from its sponsorship-driven conference model and its advertising-driven publication model (via the Journal of Financial Planning). As a result, while Membership Dues are down nearly $2M from the peak, conference and sponsorship revenue is down another $2.6M, and publication/advertising revenue is down an additional $1.8M as well.

In this context, it’s suddenly easier to see why a key centerpiece of the new OneFPA Network initiative is a (Nationally-controlled) Strategic Partnerships/Sponsorship committee, alongside a OneFPA Education Committee whose stated purpose includes “reducing competition between National and chapter events.” Because while leading local chapter events like FPA NorCal and FPA Minnesota have sold-out exhibit halls and record attendance levels, FPA’s sponsorship and advertising revenue is down nearly $4.5M in under a decade.

As the saying goes: when in doubt, follow the money. Which doesn’t bode well for how dollars will actually be allocated between chapters and National, in areas from “national” sponsorships to a new chapter dues system to the allocation of annual profits from chapters (deemed “Future Reserves” subject to National’s committees for how they will be used). As while National has struggled with its advertisers, sponsors, and events, the chapters have grown what was reportedly announced at the recent FPA Chapter Leaders Conference to be as much as $4M of cash from their own local successes.

The Elephant In The Room – Do We Need The New Chapters Or A New National?

The fact that FPA National has been unable to figure out how to grow (or even prevent a 15% decline in) its membership for nearly 18 years, despite being focused on a base of CFP certificants who themselves have more-than-doubled over that time period, ultimately raises the question of whether the real problem is “the chapters” not being sufficiently “aligned” and “integrated,” or if the problem is actually the National organization itself. Especially given that the chapters have on average continued to grow their reserves, to the tune of millions of dollars (albeit with some chapters far more successful than others), even as National has watched its combined advertising, sponsorship, and event revenue fall by $4.5M/year over the same time period.

Especially given the reality that the FPA has largely been controlled by the same leadership over the entire 20+ year period, as current Executive Director and CEO Lauren Schadle joined the ICFP as its Director of Membership and Marketing back in the 1990s, then become its Associate Executive Director and Chief Operating Officer when the FPA merger occurred in 2000, acceding to become the CEO in 2012 after then-CEO Marv Tuttle retired (who himself was previously Associate Executive Director of the ICFP in the 1990s).

And notably, Schadle’s leadership is supported by David Brand, who joined the FPA in the fall of 2013 as its “Strategic Director” (perhaps not coincidentally, just months before the FPA began laying the strategic groundwork for its OneFPA Network initiative), and was more recently cited as the FPA’s Chief Operating Officer earlier this year (in the midst of his public comments about dissolving the FPA New York chapter earlier this year in what was clearly, in retrospect, a beta test execution of the chapter dissolution process). But in addition to his more recent role with the FPA over the past five years, Brand is also the former Executive Director of the ICFP from back in the 1990s (in charge of the organization back when Schadle was first hired).

Which means the FPA has been largely driven by the same former-ICFP leadership for more than 20 years, throughout a time period where the organization’s membership has remained stagnant and declining, and its business model is slowly and steadily eroding. Not to mention that one of the drivers of the merger of the ICFP into the IAFP in the first place were the reported financial woes of the ICFP, even in the 1990s, as the organization struggled to figure out how to effectively sustain itself in the face of advertising and sponsorship revenue challenges! A problem that is now repeating itself again... under much of the exact same leadership.

In this context, then, it’s notable that while the FPA (and former ICFP) leadership of Schadle and Brand have developed a OneFPA Network initiative that suggests ultimately FPA’s struggles of waning membership and declining advertising and sponsorship revenues are impliedly “the chapters’ faults" for not being more aligned and integrated... it's the chapters that are successfully building reserves, and FPA National is the organization facing a financial decline remarkably similar to the one that eventually toppled the ICFP nearly 20 years ago.

And while FPA National leadership insists that it faces daunting “landscape challenges” as an association (a phrase often repeated in the OneFPA Network proposal), and the concerns of “increasing competition,” the reality is that not only are many of its chapters largely succeeding financially (except for National-level membership woes), but every other major association and organization serving financial planners was able to grow throughout the 2000s, and both the AICPA's PFP section, IMCA (now IWI), and NAPFA are all up more than 50% in membership since the financial crisis (while the CFP Board has increased the number of CFP certificants by over 40%, which is more new CFP certificants that the FPA failed to capture than members the FPA even has in the first place)!

And so in the end, while Schadle and Brand are certainly nice and pleasant people – having worked alongside them on various FPA committees and task forces for nearly 15 years as an FPA volunteer myself – the question still arises for the FPA National Board: how many consecutive years does the FPA have to fail to grow under current leadership before the organization acknowledges that just maybe it’s not the chapters’ fault for FPA’s woes, but simply that the current leadership doesn’t know how to make the FPA succeed in the current environment? (And that blaming the chapters for National’s failures as a reason to dissolve chapters into a OneFPA Network isn’t the solution?)

If FPA National Can Execute The OneFPA Network Transition, Then Execute It Without Chapter Dissolution?

Notwithstanding all of these concerns, there is still a fundamental reality that having a series of 86 independent chapter entities isn’t necessarily the most efficient way to grow and execute a membership association. As while it may have been necessary both as a startup association 30+ years ago – that didn’t have much of any national resources at the time – and in an era where communication and collaboration tools were more limited (predating not only the internet and email but even fax machines!), arguably there’s little functional reason to have each chapter reinventing the wheel independently every year.

In fact, as a longstanding chapter volunteer (and former chapter President myself), the conversation that “chapters wish there were more/better centralized resources” has been a common wish and complaint of chapters for all 15 years I’ve been involved in the organization. A desire for everything from a standardized Chart Of Accounts to facilitate chapter bookkeeping (and make it possible to do nation-wide chapter benchmarking studies), to templates for how to run a local chapter event or structure local sponsorships, to a shared database of potential speakers, and a more effective centralized database for membership, has been discussed in FPA chapter leadership circles since long before the OneFPA Network initiative was proposed.

Which raises the question: if FPA National is so confident it can create all of this centralized functionality for its chapters under the OneFPA Network… why hasn’t it already created these resources?

As while chapters are technically independent entities, they are driven by usually-time-strapped volunteers who would happily adopt easier/superior systems handed to them from National. In fact, that’s literally what the chapter leaders have been asking for, and why FPA National states it is proposing the OneFPA Network in the first place (“in response to requests from chapter leaders for more consistent and integrated systems…”). So if FPA National is so capable of executing high-quality centralized resources… again, why haven’t they been created already?

The problem, in a word: Execution. From building a centralized speaker database that proved so cumbersome for chapters that they just implemented their own shared Google Sheet instead, to the failure of National to provide a standardized Chart of Accounts for chapters to keep consistent books (and establish a benchmarking process for chapters), a series of different National-facilitated website providers for chapters that have repeatedly created websites of lower quality and at higher cost than what many chapters already built themselves, to continuous requests from chapters leaders for FPA National to upgrade its existing membership database that they already want to plug into and use more… the FPA National organization just hasn’t managed to deliver very effectively on the very systems that it could have been building already and convinced chapters to voluntarily adopt… for which its solution is to dissolve the chapters and force the TNCs to use whatever National creates regardless of whether it’s really an improvement or not?

In other words, while National cannot necessarily force and compel chapters to use centralized systems it makes under the current independent chapter system, it can certainly create the systems and simply make them so useful that chapters would want to use them anyway, especially since chapters are already asking for it in the first place! After all, it would be different if National already had fantastic centralized functionality systems, and just couldn’t get its chapters to implement them. Except in truth, it actually could, as all chapters are bound by the FPA Affiliation Agreement in which FPA reserves the right to require chapters to follow Nationally-established policies and procedures already (which could include requirements to use FPA-designed centralized systems).

Which makes it all the more confusing as to why FPA National feels the need to dissolve its chapters, consolidate their assets, take oversight of their budgets, finances, sponsorships, and excess reserves in the future, just to implement “centralized technology” that it could implement already under the current system, and has already failed to do effectively enough to gain chapter adoption for more than a decade already?

Do FPA Chapters Have Any Alternative To Being Dissolved And Forfeiting Their Assets? Plan B…

So what can FPA members, chapters, and their leadership do if they’re unhappy with the OneFPA Network as it stands?

The starting point is to share your feedback. As noted earlier, FPA National is accepting comments directly at [email protected], though notably those comments will not necessarily even be made public (which makes it hard for FPA National leadership to be held accountable to honoring them). For those who prefer, comments can also be left here on this blog post, which we will also direct to the National Leadership.

Second is to get involved in the FPA Leadership’s “Listening Tour” as a way to provide more direct feedback to National leadership. Unfortunately, though, unlike the CFP Board – which publicly posts available locations to meet the leadership when it does a Listening Tour – the FPA Leadership has not made any information publicly available about its Listening Tour for members. Even the Listening Tour information on the OneFPA Network website provides no indication of any opportunities for in-person meetings, only for local chapter boards to schedule a virtual Listening Tour meeting in the form of a 1-hour Zoom webinar. Ostensibly, it’s then up to local chapter boards to communicate and pass the word along to their members (and collect the feedback from their members to share back up the line).

More broadly, though, it’s important to note that as long as local chapters remain independent entities, they are in control of their own organizations, and their own finances and reserves. And while the FPA has made it clear that the current chapters will be dissolved at the end of 2019 – and that under the chapter affiliation agreement, all remaining reserves must be distributed to National – it’s up to the chapters to decide how much in reserves remain on their books by the end of 2019.

Which means chapters that want to “conscientiously object” to consolidation of the chapter – and its accumulated assets – to National do at least have the option, as a 501(c)(6) non-profit entity, to potentially donate their excess reserves to some other charity instead, like the already-FPA-chapter-supported Foundation for Financial Planning and its pro bono financial planning services. Notably, chapters should still maintain sufficient operating reserves to execute the organization itself – or its board members risk breaching their own fiduciary duty to maintain the integrity of the organization. But for chapters that have accumulated substantial excess reserves, chapters do technically have a choice as to whether to allow their excess reserve assets to be escheated to National at the end of 2019 or not. (Though state laws may vary; please consult your local attorney!)

Similarly, there may even be an opportunity for chapters to remain independent entities and choose to re-affiliate themselves to another national organization besides the FPA. For instance, would NAPFA, the Investments & Wealth Institute, or even the CFP Board, be willing to create its own form of a chapter affiliation agreement for the local entity and local leadership to continue as overseers of a new alternative membership organization. Or even donate their excess reserves to a new local 501(c)(6) membership association to replace the current one, that in turn affiliates with another of the financial advisor membership associations or organizations?

In point of fact, the subset of Alliance Forum chapters (the ~10 largest chapters of the FPA) may even have sufficient excess reserve resources to seed their own competing membership association to the FPA and re-affiliate themselves to a new organization instead. (Albeit while still reverting their existing operating reserves to FPA National under the existing affiliation agreement.)

Which means if FPA National cannot get its chapters to truly buy into the vision of what it’s proposing to create in the OneFPA Network, it runs the risk of causing a schism that re-creates the very split that the ICFP and IAFP merged together 18 years ago!?

Is FPA National Leadership Actually Ready To Take The HDR Feedback?

According to its OneFPA Network proposal, the FPA leadership has indicated that it’s interested in feedback (via the Listening Tour) and that the organization "wants" a diversity of views on an ongoing basis (through the breadth of the OneFPA Council). Which suggests that, hopefully, the FPA will be open to feedback and constructive criticism about the very real concerns created by the current version of its OneFPA Network proposal.

FPA National Retaining Tools To Quell Dissent?

However, in practice, it’s not clear how open the FPA will actually be. As while the organization has announced a “Listening Tour” (that has already been underway for nearly a month), it has failed to publish ANY dates or locations to the general membership to participate, share their feedback, and feel they’ve been listened to.

Similarly, most of the FPA membership didn’t even learn about the OneFPA Network proposal from the FPA, which shared the initiative with (just) a small subset of its chapter leaders who attended its Chapter Leadership Conference in person on November 3^rd, and then failed to share the announcement with the rest of the membership for nearly 2 more weeks, leading most members to learn about the initiative through third-hand news coverage from Investment News and other industry trade publications instead.

In addition, there are other very concerning overtones in the OneFPA Network proposal itself that suggest the FPA may not be ready and willing to accept constructive criticism and disagreement. For instance, the original proposal included a requirement that in the future, “volunteers of all committees, councils, and task forces will be required to complete Leadership Institute and FPA Champion Program training,” where the “Champions” program requires the member to “motivate and inspire [other] members and volunteer leaders towards the vision of the OneFPA Network” and “utilize Appreciative Inquiry best practices to help others see the big picture [and] understand the benefits.” In other words, all volunteers would literally have had to go through “toe the company OneFPA Network line” training, and failure to do so can result in them being removed as volunteers for failing to adhere to the training. After an initial uproar, the "Champions" requirement was removed, though the updated version will still require all volunteers to complete the FPA's Leadership Institute training and an orientation process.

Similarly, the shift of chapter administrators and other local-chapter FPA staff to become employees of FPA HQ, for which National has explicitly retained the right to making firing decisions and conduct performance reviews (even if the administrator is solely in the service of a local chapter far from FPA HQ), means FPA National has wide latitude to terminate any chapter executives who fail to get on board with the OneFPA Network initiative and toe the company line. After all, it’s one thing for volunteers to raise concerns about the merger; it’s another thing to tell all chapter executives, “we’re open to a diversity of views, but bear in mind that in under 13 months, we’ll be terminating your employment with the chapter and we’ll be your employer instead.” Choose your words wisely, chapter executives?

And the concern is not just one of idle musing. When this blog published an article criticizing the execution of the FPA National leadership once in the past, the organization responded by changing its attendee policy for the FPA Chapter Leaders Conference to ban my future attendance (after having been a participant for 10 years), and issued a public letter from the National leadership suggesting that I shouldn’t be so critical of the FPA given that it “has done so much to support [my] own career and business advancement”… turning constructive criticism of the organization into a personal attack from National against its author, even as the “criticism” was widely supported by chapters (because the concerns were accurate and reflective of the membership), and failing to recognize that I’m critical of the FPA precisely because I want to see the organization succeed, having 10+ (and now 15+) years as a member and volunteer!

In fact, in recent years the FPA implemented its own “HDR” (Honest, Direct, Respectful) initiative for internal communications in recognition of the fact that the organization has a troubled track record of accepting constructive criticism and dissenting feedback.

The FPA Trust Deficit And The Us Vs. Them Mentality

Change is hard for any organization, and the uncertainty it creates can be unsettling. Which FPA National itself has acknowledged in emphasizing that “leading an organization through a transformational change initiative requires both recognition [that a problem exists that requires solving] and courage to sufficiently disrupt the status quo to move to a new reality.”

Yet the problem is that when there’s already a trust deficit and a lack of alignment between National and its chapters, uncertainty and the ambiguity of change is far more likely to be interpreted against the organization. And in this context, it is somewhat surprisingly that, despite what the FPA itself explicitly acknowledges as an “Us vs. Them” problem between National and the chapters, it has issued a OneFPA Network proposal with a concrete 13-month deadline to dissolve its chapters, and remarkable ambiguity about how most of the important parts of the new initiative will actually work!

Thus, while the current plan is that FPA chapters will be dissolved and their assets will escheat to National by the end of 2019, National itself acknowledges that it may take up to 2 years (through 2020!?) to determine:

- How nationalized sponsorship revenue will be split after 2019, despite the fact that it’s the lifeblood for most chapters.

- Whether or how chapter dues assessments will function after 2019, despite the fact that they’re vital for the operation of many chapters.

- What happens to any/all profits that chapters generate after 2019, which future to-be-determined policies may or may not redirect away from the currently successful chapters.

- How overhead costs of National will (or won’t) be applied against chapter budgets.

- The policies and mechanisms by which the OneFPA Resource Coordination Committee will determine whether chapters are spending their resources consistent with National’s strategic framework.

- How local chapter leaders will even be elected (or selected, since they won’t be independent entities anymore) after the change occurs.

In other words, FPA National has effectively said, “We’re dissolving your independence with a hard deadline that you have no choice about and transferring all of your money to our bank account; trust us that we’ll decide how to allocate the money in a way that appropriately navigates our own $4.5M advertising, sponsorship, and events deficit, to be split in a way that you’re happy with.”

To which the FPA National leadership responds, “This is why we have a Participatory Governance structure, so you can have ‘ownership’ in these decisions!” Except the Participatory Governance structure includes a OneFPA Council with no actual decision-making authority, and all key committees in which the OneFPA Council members participate are designed to still retain National Board control or leadership (and if ever necessary, a National-Board-appointed tiebreaker vote). Not to mention the fact that chapters themselves are being forced into the new “Participatory Governance” structure, in which the designated structure is “50% National representation and 50% chapter representation!” And the FPA wonders why there is such an “Us vs. Them” mentality?

Simply put, you don’t fix an “Us vs. Them” trust problem by engineering an aggressive takeover while saying “trust us.” If you want us to acquiesce to your governance, try showing us some execution that actually works first.

Where Should FPA National Go From Here?

So where should FPA National go with its OneFPA Network proposal from here?

The first key point to recognize is that there is no actual need to dissolve chapters to achieve most of the “Centralized Functionality” that the FPA suggests is necessary. The fact that 86 chapters file 86 separate Form 990s is somewhat absurd in practice, but it’s also a negligible cost for most chapters and the FPA as a whole. No chapter is standing up to say the organization is failing because of redundant entity administration costs. The areas of real centralized need, from a standardized Chart of Accounts for easier chapter bookkeeping and improved chapter benchmarking, to a better Membership database and technology resources for chapters to leverage, could be built now by National without consolidating the chapters. The only difference between doing so as independent chapters and a single nationalized system is that in the latter, National can force the chapters to adopt the solution, while in the current system National has to actually execute a good system and convince the chapters to use it. Given National’s problematic history with execution, that is arguably a healthy level of checks and balances!

Second, it’s time to cut the consultant-speak and the high-minded euphemisms and speak candidly:

- Don’t deny that chapters are being dissolved when it’s literally what will happen in 13 months if the current plan is executed; make a (better) case for why that’s a good thing.

- Don’t deny that there’s a massive shift in power and control to National with the new OneFPA Council and committee structure; show us why we should trust it.

- Don't say that this is an opportunity for "transformational change" for the organization and then claim that nothing will change for the chapters; it literally makes no sense to say we'll accomplish transformational change without changing anything, and just breeds even more distrust that National must be intending to make "transformational" changes after the fact when chapters can no longer object.

- Don’t deny that this isn’t about taking control of the money and revenues so that sponsorships and chapter dues can be re-allocated more towards National and away from the chapters; show us exactly what you will do with the money that can lead us to better outcomes.

- Don’t say that the purpose of this change is to create better “alignment” and then deny that a part of creating alignment will involve eliminating the naysayers who aren’t aligned to the new vision; instead, paint a better picture of the vision that really gets us all on board.

- Don’t say that this has been communicated as part of the OneFPA initiative all along, when over the past 2 years the leadership has flatly denied that the move to state councils with centralized FPA HQ staff and the dissolution of the New York chapter was laying the groundwork for eliminating chapters, only to now claim in retrospect those really were “beta tests” all along; and don't now claim that the OneFPA Network was just a "recent" initiative decided at the June 2018 board meeting when the proposal already acknowledges "beta tests" going back for several years; instead, be honest and truthful about what’s actually been done, and what the plans really were and when, because it’s the only way we’ll possibly ever trust your statements about where it’s going from here.

As at this point, it’s still not at all clear what makes the OneFPA Network have any more buying power than chapters, when it’s still the same number of events and members and the only difference is that national controls the dollars and the bargaining (unless, of course, it's about negotiating centralized sponsorships that allocate more sponsorship dollars to National?). And it’s still not clear why the new centralized functionality systems have to be created within a new OneFPA Network organization when FPA National hasn’t been able to execute technology effectively to empower chapter leaders in the current organization with the membership database it already designed and operates. And it’s still not clear how FPA creates greater brand awareness and a greater voice in the profession when the OneFPA Network will still have the same number of (consolidated) members and chapters are already required to represent the FPA brand consistent with the affiliation agreement requirements.

Third, if FPA National really wants to get all of its chapters and members on board, put a hold on the entire OneFPA Network proposal, and create the necessary time to dig into the real details. If the organization believes it can execute the entire transition in less than 13 months, it should be “easy” to really flesh out a detailed proposal of how all this will work in even less time, provide details in all the requisite areas that explain how this OneFPA Network is really going to work and make sure that chapters are really on board. Which means it’s time to get rid of “placeholder” labels and committees, and “To Be Determined” committee agendas, talk about how the money will really flow, under what policies and procedures, with what splits and revenue and cost allocations, and what the implementational plan will be to get from here to there. And how we intend to measure whether the initiative is successful or not, beyond just saying that “a set of robust measures” will be developed at some indeterminate point of the future – which is the very epitome of not creating accountability for outcomes!

Because in the end, it’s simply not enough to say that FPA is a “Learning Organization,” take a track record of inconsistent execution, stagnant membership, declining revenues and say, “I know all your chapters and money will but gone, but trust us, this time it will be different.” It’s not even clear that local chapter board members could say yes to such a blind-leap proposal without more due diligence on the actual details, or they’d risk breaching their own fiduciary duty as board members of the local chapter organization!

But ultimately, the real question that needs to be considered by the FPA National Board is not whether or how to better present the details of the OneFPA Network proposal, but to look at the root causes that have created its “need” in the first place. If the problem has been a failure of good centralized technology that chapters will adopt, the solution isn’t to dissolve the chapters and force them to use what’s been created; it’s to address the execution problem that has made chapters not want to adopt it in the first place. And if the problem is that 86 chapters are not well aligned after 18 years of the merged organization, is that really the fault of the chapters, or the fault of National staff leadership for failing, after 18 years, to figure out how to align them to begin with? Exactly how many years should the membership be expected to wait, in the face of stagnant membership, declining revenues, and problematic execution, that has created an “Us vs. Them” mentality in the first place, before we decide that maybe, just maybe, the problem isn’t actually the chapters in the first place? If six years of flat membership and declining revenue under the current leadership, despite their 20+ years of history with the organization, still isn't long enough to be held accountable for their results, then how long does it take? And if the National Board really believes that the OneFPA Network is the right vision for the future, should the current leadership be held accountable for its already-painfully-botched execution and communication of the rollout of such an organizationally-critical initiative?

Or stated more simply, perhaps it’s time for the National Board to address the real elephant in the room, which is not whether the OneFPA Network is structured properly (though it’s not), and whether it should be delayed (it should), but whether it’s really time for The New Chapters in the first place, or The New National instead?