Already being experienced by consumers and financial planners, it seems that the economic downturn has arrived on the doorstep of the Financial Planning Association as well. In the past week, the FPA national organization has slashed their staff by approximately 12%, and the price of their upcoming conference by over 70%!
Investment News was the first (that I saw, at least) to break the story last week that FPA was cutting their full-time staff of 79 (including the Denver and Washington D.C. offices) by 10 positions, shortly after the individual staff who were being laid off were notified. In a follow-up email sent to members by FPA CEO Marv Tuttle, the Board of Directors approved the layoffs not so much in response to declines in revenue for their current 2008-2009 fiscal year (which have been modest but addressed via ongoing budget adjustments), but instead in response to an environment anticipated to be more difficult in 2009-2010. Given that the FPA Annual Convention in the fall in particular constitutes a significant piece of the FPA's budget, it appears that they are anticipated a significant decline in sponsorship revenue for this fall's conference (which would fall into their 2009-2010 budget year).
In addition to cutting stuff, FPA is also slashing the pricing on its upcoming Business Solutions conference, from an original price of $825 down to a new price of only $225 (or for non-members, from $1,125 to $550). One can only presume that registrations for the event have been less than optimal. However, it's worth noting that if I had registered early (at $825) and now discovered the registration price had been cut by 70%, I'd be pretty upset. I have no word one way or the other about whether FPA has done anything to retroactively compensate early registrants who paid the original much higher registration fee.
Overall, I feel compelled to commend the FPA for making the decision to keep the event as an opportunity to provide benefits to members in these difficult times (at what ostensibly will be a financial loss for them at this registration cost), rather than canceling the conference completely. Likewise, although it is certainly quite sad to see layoffs happen (and I count several personal friends amongst the FPA staff members who lost their jobs last week), I feel compelled to acknowledge the efforts of the Board to make decisions earlier rather than later to preserve the financial integrity of the organization, forecasting (appropriately, I think) that there may still be a difficult road ahead for the organization.
On the other hand, many critics will point out that FPA's declining renewals and revenues may be as much attributable to their somewhat "controversial" significant dues increase last year, which in retrospect appears to have been poor timing in light of the economic environment that has unfolded. To say the least, the organization seems challenged to justify their economic value more than ever, in the face of higher dues and a different economic environment that makes every financial planner and planning firm carefully evaluate its expenses on budget line items like membership organizations.
In the meantime, if you want to look at some of the FPA's numbers yourself, you can see a copy of their 2007-2008 Audited Financials (and prior years) here, and their original 2008-2009 Proposed Budget here (FPA member login currently required for the budget document). And if you're interested in the newly discounted FPA Business Solutions conference, check out their full session schedule here, or click here to register for the conference.
And of course, feel free to post in the comments section what you think about the FPA's recent actions. Is this an organization demonstrating fiscal prudence and member benefits, or do you believe the FPA on a road to ruin?