It’s no secret that the Financial Planning Association has struggled for many years with stagnant membership amidst an increasingly difficult and competitive landscape for membership associations given both the rise of social media (and more online platforms for people to connect outside of traditional networking and professional associations) and intra-industry competition from other membership and trade organizations and even media companies competing for advisors’ attention.
In the case of the FPA, though, the situation is further complicated by the fact that the FPA is not just a single entity, but a national “parent” organization that has 86 separate chapters – each its own legal entity with its own Articles of Incorporation, Bylaws, and Board of Directors – that each sign an “affiliation agreement” to represent the FPA at the local level. And while in the early days of the FPA and its predecessor organizations, a distributed chapter system was necessary – where there were no resources for a national organization, nor the kind of centralized communication and business management technology to execute a national organization – in today’s environment, it simply means 86 different entities repetitively filing Form 990s, 86 different entities implementing their own technology, and 86 different entities each rowing in their own similar-but-not-always-same direction under the national affiliate umbrella.
To address this challenge, last month the FPA issued a proposed initiative to re-form the FPA as not a series of 86 independent chapters (plus 2 state councils!), but a single national entity under one umbrella that can better centralize technology, operations, accounting, and other largely redundant functions of the individual chapters, while reconstituting “The New Chapters” (or TNCs for short) that will no longer be discrete entities but will still have ultimate responsibility for implementing their own local budgets to run their own local programs.
And in return for becoming part of the new “OneFPA Network,” chapters will have the opportunity to send representatives to a new “OneFPA Council” – a form of Participatory Governance system that will allow both a pathway for chapters to provide feedback to the National Board, and also to populate and be represented on key National committees regarding everything from Strategic Partnerships and Resource Coordination of chapters, to the Nominating Committee of the National Board and a new OneFPA Leadership Institute for the development of future volunteer leaders.
Ultimately, the new OneFPA Network is scheduled to roll out at the end of 2019, but the FPA leadership has already launched a “Listening Tour” series of meetings with FPA chapter boards to gather feedback as the final details of the structure are sorted out in the coming months. Though in the end, the real question is not simply how the OneFPA Network will work, but whether it will work, and be the transformational change the FPA really needs to reinvigorate its growth? (Stay tuned for my own thoughts on the likely efficacy of FPA’s OneFPA Network proposal next week!)
The Origins Of The FPA Chapter System
Almost exactly 49 years ago, on December 12th of 1969, a marketing consultant and motivational writer named Loren Dunton convened a meeting in a hotel room near Chicago’s O’Hare airport with a former insurance-salesman-turned-school-supplies-salesman named James Johnston. According to “The History of Financial Planning,” the stated purpose of the meeting was to raise the level of professionalism in retail financial services, and “to make ‘financial consulting’, rather than salesmanship, the driving force of the industry.” And at the meeting, Dunton established the International Association of Financial Counselors (later known as the International Association of Financial Planners or IAFP), along with the International College for Financial Counseling (which later became the College for Financial Planning).
The promote the newborn organization, a few weeks later in early 1970 one of the co-founders held a sales workshop in Cincinnati, drawing about 40 attendees, most of whom signed up as new IAFP members. One of which was the now-legendary P. Kemp Fain, who worked for early financial planning pioneer Financial Services Corporation (now FSC Securities under Advisor Group), and upon returning home to Knoxville from the first IAFP meeting, established the first local IAFP chapter. Within 3 years, the IAFP had 3,000 members across 37 chapters, and would nearly double its number of chapters again in the subsequent 3 years.
In the meantime, the College for Financial Planning had begun to develop its first CFP certification curriculum, and in the fall of 1973, confirmed its first class of 42 CFP certificants. And in the hours immediately following the conferment ceremony on October 13th of that year, 36 of the graduates decided to form their own alumni organization specifically to focus on supporting fellow CFP certificants, known of the Institute for Certified Financial Planners (or ICFP). And while the ICFP initially conducted its meetings and activities jointly with the IAFP and operated with support from the College for Financial Planning itself, in 1979 the ICFP split off to its own fully independent organization, and within 4 years it had formed 20 of its own local “study groups” that became local “societies” (i.e., chapters) of the ICFP (which more-than-doubled as well over the subsequent 3 years).
Notably, while both the IAFP and ICFP did have “national” organizations in addition to local chapters (for IAFP, or “societies” for the ICFP), in the early years of the center of gravity for both organizations were their local entities, which were formed independently and affiliated back to the national organization. Which isn’t entirely surprising, as most business at the time was conducted by mail and the then-emerging fax machine for “speedy” business communication. Having a centrally organized and executed association just wasn’t feasible at the time; the only (or at least, best) path to growth was to let chapters establish and run themselves as affiliates of the national organization, where local leadership could best determine the needs of the local advisor community.
Thus, by the time that the IAFP and ICFP ultimately merged to form what is now the Financial Planning Association in 2000, the combined organization was built on a foundation of more than 100 chapters (even after blending and merging together some IAFP and ICFP chapters) serving over 30,000 members, with a vision of growing even larger to service the ongoing growth of the emerging financial planning profession.
The Inconsistencies And Inefficiencies Of FPA’s Decentralized Chapter System
While a de-centralized structure was arguably a necessity in the early decades of the IAFP and ICFP, and even the early years of the FPA itself, given the practical and cost constraints of trying to centrally manage and execute a large organization (especially given what at the time were limited resources for the IAFP, and very limited resources of the ICFP that helped to spur the merger due to financial difficulties), the chapter structure is not without its own costs and challenges.
As the fact that, technically, each FPA chapter is its own 501(c)(6) locally-incorporated entity that has chosen to sign an affiliation agreement with national means each chapter still needs its own articles of incorporation and bylaws, must handle its own accounting and file its own Form 990 with the IRS, must hire and manage its own Executive Director or other staff (if it can afford to do so), and must implement its own systems and technology to run the chapter itself. (In addition to recruiting local volunteer leaders to actually lead the local chapter.) Which, across nearly 100 chapters, can create a substantial amount of inefficiency as each chapter identifies its own systems and solutions, not to mention outright redundancy and duplicative costs (e.g., filing nearly 100 different Form 990s).
In addition, members themselves get a potentially-substantially-different experience from one chapter to the next, depending on how each individual chapter has decided to structure everything from its content and meetings to its chapter communications to members. With especially stark differences between the largest chapters, that generally have the financial resources to hire an Executive Director and/or additional staff support to run the local organizations and sometimes create events that are on the scale of National’s own conferences, versus the smaller and even some mid-sized chapters that have to rely even more heavily on their volunteers just to deliver any local programs at all (with the chapter experience changing from year to year as volunteers come and go, and with a higher risk of burnout).
Hearing the concerns and struggles of at least a material subset of chapters in 2013, the following year the FPA hired an outside consultant to assess the chapter system, and not surprisingly found that there was substantial inconsistency from one chapter to the next. This, in turn, led the FPA to begin its “OneFPA” initiative, with a goal of better integrating the disparate chapters into a more single unified experience for members (and a more efficient and cost-effective system for operating). A series of 7 task forces with 50 national and chapter leaders (known as the “OneFPA Advisory Group”) was formed in 2015 to develop potential initiatives, which the FPA National Board approved in 2017, began to “beta test” in 2018, and is now rolling out in earnest through 2019 and 2020 as the “OneFPA Network.”
What Is The OneFPA Network?
At its core, the OneFPA Network is a shift away from a series of what are now 86 independent FPA chapters (along with 2 FPA state councils entities in Florida and California) alongside a National entity, into a single consolidated National entity to be known as “FPA Headquarters” or simply FPA HQ.
By centralizing the chapter system itself, the chapters can eliminate the redundancies of 88 separate sets of books, 88 filings of Form 990, and 88 different implementations of (often-similar-but-not-the-same) core technology to operate the chapter, effectively consolidating and simplifying much of the administrative burden of running the current chapter system. And in the process, freeing up more time from FPA’s chapter volunteers to actually focus on the mission and “Primary Aim” of the organization: “to elevate the profession that transforms lives through the power of financial planning.”
Of course, centralizing the implementation and execution of so much of the FPA’s chapter system involves a potential shift in power and decision-making from the chapters to the national organization. Accordingly, the FPA has paired together its vision of “Centralized Functionality” with one of “Participatory Governance,” driven primarily by a new “OneFPA Council” committee to be comprised of chapter leaders and other community leaders (e.g., NexGen) that will participate in the decision-making process with FPA HQ through its involvement in a series of subcommittees.
At a high level, FPA’s stated goal is to leverage the power of “integration” (of various systems) and “alignment” between FPA HQ and its chapters into a single unified FPA voice, on everything from its lobbying efforts with regulators and legislators to its bargaining power with sponsors and vendors to its delivery of a local chapter experience to members (regardless of where the members are).
More specifically, the FPA envisions 7 core components of its new OneFPA Network:
– Create a system and structure that truly lives the intent of OneFPA, which is to create an extraordinary and seamless member experience.
– Remove inherent national versus chapter biases and conflicts and build a compelling OneFPA brand and story.
– Integrate and align strategies, messaging, structures, functions and culture for greater efficiencies and effectiveness.
– Leverage volunteer leaders by lifting what some volunteer leaders consider to be an unnecessary administrative and coordination challenge, and position volunteer leaders for success by having them focused on what they do best.
– Create and deliver one value proposition with enhanced programs and services across FPA to demonstrate a unified and powerful OneFPA presence, integrated strategy, and valuable deliverables for members.
– Adjust FPA’s governance structure to elevate the coordination, integration, and training of volunteer leaders and staff, clarify their roles, responsibilities, functions and expectations of success while enhancing their development.
– Systematize, where possible, back office systems, technology efforts and other key functions to drive an exceptional OneFPA member experience.
Details Of The New OneFPA Network Structure: Centralized Functionality and Participatory Governance
Of course, the reality is that high-minded visions are nice, but the real question of the OneFPA Network is “how, exactly, will the national leadership and FPA HQ make this happen?”
The details are articulated in a newly launched OneFPA Network microsite (separate from the main FPA national website for members), which has a series of in-depth “FAQs,” along with an even-more-detailed 27-page document that articulates the exact structure of the OneFPA Network.
Independent Chapters (And Their Assets) Consolidated Into “The New Chapters” (TNCs)
Perhaps the biggest change with the transition to the new OneFPA Network is that the FPA’s existing 86 independent chapters (and 2 state councils) will cease to exist as such. Instead, “chapters” will simply be “geographic communities” of members of a single National FPA organization (i.e., the OneFPA Network!), dubbed for the time being as “The New Chapters” (or simply “TNCs” for short).
In the transition from independent chapters to geographic-community TNCs, all assets of the existing chapters will be consolidated into National (as once FPA National revokes its affiliation agreement with the independent chapters, the terms of the affiliation agreement stipulate that all existing chapter assets and reserves revert back to National). In turn, National will then maintain a centralized accounting system that tracks the existing revenue, expenses, and reserves of each of the TNCs, so that chapters can still maintain their own budgets.
In the future, TNCs will still select their own local leaders (though notably, FPA has yet to detail how the process will work), and local leaders will still make determinations on how to allocate their local budgets. Though TNC budgets will have to be submitted and reviewed by a new OneFPA Resource Coordination Committee (discussed further below).
Participatory Governance Through The OneFPA Council
Notably, eliminating the existing independent chapter structure creates a potential governance void in the level of control that chapters have over the organization… for which the OneFPA Network aims to fill the void by creating a new “OneFPA Council.”
The OneFPA Council will be comprised of representatives from each TNC (the chair of each TNC, as well as other non-geographic FPA communities like NexGen), and will exist for two primary purposes: 1) to serve as a sounding board and provide strategic direction to the FPA National Board (as well as input on policy- and advocacy-related positions), while FPA HQ staff work through the micro level details of implementation; and 2) to populate various OneFPA task forces and (sub)committees that will be more directly involved in the policy- and decision-making processes for FPA. Notably, the OneFPA Council is not meant to be the fiduciary governance body of the FPA (which is still the responsibility of the National Board itself), but to be the “sounding board” for strategic input (and participation on key committees and task forces).
The OneFPA Council itself will have its own Executive Committee (Chair-Elect, Chair, and Immediate Past Chair), with each incoming Chair-Elect selected by the OneFPA Council itself, and will also be responsible for selecting which of its own members are involved in various task forces and committees.
Given its breadth of representation (86+ chapters plus other FPA communities), the OneFPA Council may be quite sizable, but FPA states the size is created with an intention to generate a diverse range of views. Accordingly, the OneFPA Council itself will meet twice per year (once in the spring to provide strategic feedback to the board, and once in the fall to support chapter networking and leadership training), outside of any involvement that Council members have on various committees and task forces. (It is still to be determined how many meetings will be in-person versus video/virtual, though the fall meeting at a minimum will likely remain in person to coordinate with the Chapter Leaders Conference, which is being reconstituted as the “OneFPA Leadership Institute” in the future.)
With respect to the committees (long-term) and task forces (short-term) themselves, the OneFPA Council will have 50% representation in each committee (with the FPA National Board, or designees thereof, comprising the other 50% of each committee). The committees and task forces that the OneFPA Council will populate include:
– OneFPA Nominating Committee. Responsible for recruiting, evaluating, and ultimately recommending a slate of prospective new National Board members each year. The Nominating Committee and its recommended slate of candidates will be approved (or not) by a majority vote of the OneFPA Executive Committee and the FPA National Board itself.
– OneFPA Strategic Partnership Committee. Responsible for setting a (new) nation-wide FPA-wide pricing structure for sponsorships and corporate partners, eliminating competition between FPA communities for sponsors/partners, and setting coordination policies between National and local sponsorship arrangements.
– OneFPA Resource Coordination Committee. Responsible for reviewing annual operating plans and budgets of TNCs to support OneFPA policy and strategic alignment and optimal functioning of TNCs, reviewing chapter accounting processes (and provides monthly income & expense reports for TNCs), and providing guidance to TNCs on aligning their budgets with established guidelines.
– OneFPA Transition Task Force. Responsible for gathering feedback about OneFPA Network rollout and implementation, providing progress reports to all members and FPA communities, and managing the timeline, phasing, and strategic and budgeting plans for the development and implementation of the OneFPA Network, as well as reviewing and providing recommendations on the Governance Manual.
– OneFPA Education Committee. Responsible for integrating content across FPA communities (including across chapters), assessing the function of FPA Annual Conference relative to other FPA communities events, encouraging dissemination of best practices, and representing OneFPA on the Annual Conference and Retreat task forces.
– OneFPA Leadership Institute Committee. Provides input on training and support materials offered by the Leadership Institute to provide fundamental and enhanced skills training to all FPA volunteer leaders and offers feedback on the OneFPA Leaders Conference (along with helping to identify and recruit volunteer leaders).
– OneFPA Technology Task Force. Responsible for approving the design/development of the new OneFPA technology platform for chapters and establishing and enforcing policies with respect to use of the OneFPA technology solution.
– OneFPA Finance Committee. Responsible for monitoring the financial well-being of the FPA and providing recommendations to the National Board on budget protocols for the national organization and investment strategies for its reserves.
On an ongoing basis, the FPA National Board will review annually which committees, councils, and task forces remain necessary/relevant for future years (recognizing that the needs of the organization may change, and that task forces, in particular, are shorter-term by design).
Centralized FPA Functionality For Technology, Finance, And Staffing
The other key aspect of the OneFPA Network initiative is to centralize functionality for the key (and most duplicative) administrative functions of the organization: technology, finance and accounting, and staffing.
Accordingly, the FPA has retained a technology consulting firm called Delcor to help develop a new membership database and technology system (in consultation with the aforementioned OneFPA Technology Task Force) to administer the newly centralized OneFPA Network organization.
Similarly, the FPA has retained an accounting firm called RSM to help develop a new centralized accounting system (ostensibly working with the OneFPA Finance Committee) that will consolidate National and chapter assets and then properly account for each TNC’s own income and expenses (and reserves).
And to the extent that chapters will no longer exist as independent entities – and thus will no longer be able to direct hire and retain their own staff – all chapter executives and other chapter-related staff members will revert to being employees of FPA HQ instead, which will, in turn, be responsible for hiring, firing, and related (centralized) employee benefits and HR functions.
Implementing The OneFPA Network Transition
Ultimately, the FPA’s target timeline for its new OneFPA Network initiative is January of 2020 – meaning that by the end of 2019 (in just over 12 months), all existing chapter affiliation agreements will be rescinded, dissolving the FPA’s current chapters. (Technically the entities themselves can continue to exist after their affiliation agreements are terminated… but they will be compelled to distribute all of their existing/remaining assets to National upon termination and can no longer hold out as FPA chapters, effectively rendering them defunct former-chapter organizations.)
To facilitate the transition plan itself, the National Board has pledged a $1M budget allocation from its available reserves to help fund the transition, split approximately into 1/3rds for the new Technology infrastructure project (with DelCor), the new Finance/Accounting infrastructure project (with RSM), and Operational Transition expenses (e.g., legal costs to dissolve the various legal entities, development of the new Leadership Institute for new volunteer leaders of the TNCs, and additional staff to support operations).
In the meantime, though, the FPA leadership has committed to a “Listening Tour” with chapter leaders running from November 13th through February 22nd, and existing chapter Boards can sign up directly for a one-hour virtual slot via SignUpGenius. Based on the Listening Tour feedback, the National Board will make potential adjustments to the OneFPA Network plan in March of 2019… though, while chapters will continue to operate as usual through the 2019 year itself, they will be expected by mid-2019 to submit their first budgets for review to the OneFPA Resource Coordination Committee for the 2020 operating year.
For individual members who don’t have an opportunity to visit one of the virtual Listening Tours (or don’t have access through their local board for any local meetings that may be scheduled), the FPA is also taking comments directly via a [email protected] email address. (Or alternatively, for those who would like their comments to be seen publicly, you can also add a comment to this blog below, and we will be certain to convey the information along to National.)
In the meantime, for those who are already on board with the new OneFPA Network proposal, FPA HQ has issued guidelines on how to become a “OneFPA Network Champion,” where the FPA will use your picture and likeness as a member to show you’re a supporter of the initiative, and assist National in communicating the proposal and its anticipated benefits to members.
Stay tuned next week for an article on our own thoughts regarding the likely efficacy of the OneFPA Network proposal. In the meantime, though, please share what YOU think? Will it accomplish the FPA’s “transformational” goal of reigniting growth? What questions or concerns do you have about the structure? Please share your thoughts in the comments below!