After 20 years of wandering in the desert, is the Financial Planning Association finally on the right track?
Patrick Mahoney, the new CEO of the Financial Planning Association, has had what could fairly be described as a rocky tenure in his first official year on the job. Rocky? Consider that he was named interim CEO in June of 2020, at a time when the association’s membership had fallen, in just two years, from 24,000 to 18,000, which was merely the latest extension of a long membership decline that goes all the way back to the merger that started the organization 22 years ago. He stepped into the role during a time when the association was dealing with the consequences of its latest misstep: an angry backlash triggered by the botched rollout of the OneFPA initiative that inflamed the FPA chapters’ distrust of their home office staff leadership.
And then there was Covid.
“When I came onboard [as interim CEO], the Denver office had been on lockdown since March,” Mahoney recalls. “It really affected my ability to meet people in person, which I always prefer. Beyond that,” he continues, “one of the things we learned is how core that in-person experience is to the DNA of a financial planner. Chapter meetings were disrupted, and the lack of being able to convene at the chapter and national level, in addition to the financial impact, really hit everybody in the solar plexus. It reminded everybody of how we value the networking aspects of being a member.”
Mahoney’s first official day as CEO of the Denver office was almost exactly a year ago as you read this, not long after the FPA had been forced to cancel its fall conference and as the 11 volunteer chapters began fully implementing a revised OneFPA roadmap.
With this swirly of chaos and controversy, some readers might be surprised to learn that, for the first time in decades, there is reason for optimism. Over the past 12 months, under Mahoney’s leadership, the FPA’s membership has stabilized despite every possible headwind (including, of course, the Delta Covid variant). The association has executed a second successful externship program for students and would-be advisors over the summer months, planting relationship seeds that will expand awareness of the profession among career changers and college students, and almost certainly grow future membership both in the profession and the FPA.
Perhaps most importantly, Mahoney has created something that had been crucially missing in the organization under its former staff leadership: a genuine two-way dialogue where the chapters and members are able to effectively communicate their ideas and concerns with the Denver office—and be heard. The new FPA Advisory Council brings together (lately, virtually, of course) the leaders of 80 FPA chapters with Mahoney and key board members, who together are brainstorming ways to reverse the decline and put the FPA on what would be its first growth path since inception.
Three legs of the stool
Mahoney was initially hired by the FPA Board as a consultant who (it was hoped) might offer some suggestions on how to steer the association out of the ditch. At that time, given the long history of membership decline and recent chapter rebellions, it was possible to wonder about the organizations’s future survival. But where others had been focused on the discouraging past, Mahoney perceived an encouraging future.
“I had the benefit of guiding the board through a strategic planning session and the budgeting process during 2020,” says Mahoney. “And along the way, I came to fall in love with the FPA. The planning profession resonated with me deeply, the impact that financial planners have on the nation, how people need financial planners for this transfer of generational wealth and for their own well-being. When you think about the important relationships that people have professionally,” he continues, “aside from their physician, the talks you have with your financial planner are right up there in terms of intimacy. Financial planners touch a lot of different aspects of a person’s life, and the whole helping profession mantra really, deeply, resonated with me.
“The more I learned about the FPA,” says Mahoney, “the more I began to see that the glass was half-full here, not half-empty.”
In his conversations with chapters and the board—and in this interview—Mahoney reliably repeats the idea that, going forward, he wants to focus on the windshield, not the rear-view mirror—in other words, on the future, not the past. Looking ahead, his agenda is to address what he calls the three legs of the stool, what he has come to to view as the three keys to organizational recuperation.
The first leg was to reach out to the trade and national press, and tell the FPA’s story. “I felt that the FPA was a bit of a candle under a basket,” Mahoney says. “Culturally, here in Denver, there had been this predisposition to focus on palace intrigue, rather than an emphasis on communicating the impact that our members were making in their local communities and their clients’ lives. There was not, in my mind, enough emphasis on communicating to the profession what our chapters were doing to drive professionalism. I felt very strongly,” he adds, “that we had to get the word out about the value of FPA to the nation, and what the financial planning profession means to the average American.”
This initiative has seen Mahoney and 2021 FPA president Skip Schweiss embark on press tours, and things like being interviewed on Ric Edelman’s radio show. This is obviously not a quick fix, but one can certainly argue that a plan to systematically publicize the FPA and the benefits of the profession is long overdue.
“The second leg of the stool,” says Mahoney, “was: I became acutely aware of the lack of trust between the national office and the chapters. I wasn’t responsible for any of that; it all predated me, obviously. But the buck stops with me as CEO.”
The solution there was simple but labor-intensive. “I decided, on my own, without anyone asking me to do it, to meet with every single chapter board, one on one,” says Mahoney. “Covid didn’t help with that,” he adds wryly. “But as of last Tuesday, I have met virtually with 45 chapter boards. Typically, they would add me to the agenda of their regular meeting. And what I discovered,” he says, “was that for most of them, they had never heard from the CEO before.”
These initial conversations tended to be pretty basic. “They told me that they were grateful that I was taking the time with them,” says Mahoney. “What I told them was: this is my opportunity to listen, and to take your suggestions and ideas back to the office and incorporate that into our planning. We’re here to help you, not the other way around. I know that is a vibe that you may not be accustomed to from the national office, but that is the way we’re going to do things going forward. This is a partnership, and we have to do this together.”
The key talking point, which Mahoney reiterated at several points in the conversation, is that the way to turn the membership decline around is to make a fundamental shift in the home office’s relationship with FPA members.
This change in perspective will be the key to Mahoney’s legacy, and represents a clean break from the association’s dysfunctional history. In the past, the home office attitude, which was actually expressed directly to many of us in the press and during meetings, was that the members existed to ‘support the FPA.’ Those of us who questioned what seemed to be misguided policies or flawed execution were urged (sometimes angrily) to stop pointing out problems and ‘be more supportive.’ This focus on the association rather than the membership showed up most prominently in a strange lack of tangible member benefits flowing out from the FPA; indeed, virtually all of the benefits of being an FPA member, with the exception of the Journal and the new externship, were created and delivered at the chapter level, with little support from the home office.
Going forward, as of his first day on the job, Mahoney says, the FPA exists to support its members and the profession, not the other way around. The idea is that if the FPA’s pooled resources can strengthen and benefit the businesses of financial planners, the benefits will flow both to clients, on one end, and entice more members to the FPA, on the other.
This introduces the third leg of Mahoney’s stool. He says that the FPA’s inverse focus showed up immediately in a curious feature of the home office’s staffing.
“I quickly realized that I had inherited an organization that didn’t have a membership department,” he says.
“You heard me correctly,” Mahoney adds, perhaps sensing disbelief in the interviewer’s facial expression. “They had a marketing department that hawked membership as a product. But there wasn’t anyone specifically focused on membership retention and service.”
This might actually have been the first leg of the stool, because it represented the first changes that Mahoney made in his staff leadership role. “During the summer of last year, when I was still the interim CEO,” he says, “I made some very tough staff changes. We said goodbye to a lot of folks. But that also gave me the opportunity to say hello to some new folks with different attitudes.”
The new hires prominently include Leslie Whittet in the newly-created position of Chief Membership Experience Officer. Whittet was formerly Senior VP of Chapter Operations for the Association for Corporate Growth in Chicago, and has led workshops on creating beneficial association member experiences. “The chapter DNA is deep within her,” says Mahoney. “This was very important to me, because the DNA of the FPA is profoundly embedded in its chapters. I felt that we had to reconstitute our level of service to them.”
Whittet leads a new membership experience department and also a chapter experience team that will help chapters better serve FPA members on their level. “I specifically hired people who have a chapter-first, member-first service mentality,” says Mahoney, “because I wanted our folks to engage deeply with our members and for our members to feel listened to and valued.”
Other hires included Danielle Andrus, formerly Executive Managing Editor of Investment Advisor magazine, as the editor of the Journal of Financial Planning; new Chief Financial Officer Sandra Garcia from the Escuela de Guadalupe educational institution in Denver; Kyle Jordan as the new Director of Meetings from the INFORMS association for professionals in analytics and operations research; and Director of Strategic Partnerships Amy Woodward, who comes to the FPA from a position as Senior Director of Corporate Relations at the American Gastroenterological Association.
The earliest fruits of their labors are negotiated discounted arrangements with Zoom, Constant Contact, Survey Monkey and Quickbooks. “That puts the chapters in a position to save about $2,000 annually,” Mahoney says. Denver staffers are helping to create or upgrade chapter websites and facilitating a standardized accounting service that would also allow chapters to benchmark themselves against each other. “We’ve been rolling out technology services to the chapters on a strictly voluntary basis,” Mahoney explains. “It is all about making things easier for them.”
For the rank and file membership, the member experience team has cut a deal that gives FPA members access to the Chalice Network and its various group discounts and tech offerings, plus group discounts on Verizon, Office Depot and continuing access to discounted group insurance programs through Ryan Insurance.
“And we recently negotiated a deal with SoFi, making that planning service available to our members, many of whom are dealing with folks who are carrying a heavy student debt load,” says Mahoney.
Even the most ardent critics of the OneFPA initiative (this writer was one of them) will reluctantly admit that there was a lot of good mixed in with the bad, and Mahoney has spent a long year working with the eleven volunteer chapters to separate the one from the other. The FPA sent out an update on December 10 to its membership, as the initiative was drawing to a close, and the message could not have been clearer about which aspects of the original initiative were being cast aside.
It reads, in relevant part:
A frequent request is for me to directly address the lingering concerns about FPA attempting to (a) centralize chapter finances, and (b) consolidate the legal status of our chapters at the national level…
Centralization of finances. This was abandoned early on. It has not been pursued and will not be pursued. There was little—to-no—acceptance of this idea by the chapters. And there is no feasible nor practical method by which to review the budgets of 80 chapters…
Consolidation of the legal status of FPA chapters. This was abandoned early on. It has not been pursued, and will not be pursued. Our ever-important chapters are independent legal entities. Their autonomy is respected and encouraged.
What were the good aspects? Mahoney has already alluded to increased technology support from the FPA’s home offices, which was included in the initial OneFPA proposal. The financial benchmarking tool was another part of the proposal.
But by far the most important development to come out of OneFPA is a new FPA Advisory Council, comprised of representatives from all of the chapters—and including a new Advisory Council Executive Committee. 2021 Chairperson of the Advisory Council Executive Committee, Kris Tower of American Portfolios in Denver, recalls his skepticism when he was first informed that the FPA was about to roll out OneFPA to the broader organization.
At the time, Tower was president of the Colorado chapter, and as such, he was one of the few members to receive advance warning about the initiative. The advance communication process did not inspire trust.
“Right after the FPA national conference in Chicago , they asked some of us if we could stick around,” he says. “They took us into a room and had us all sign a nondisclosure agreement. I thought, oh, this is going to be interesting, if you’re asking us to sign NDAs before we’ve even started talking.”
Tower recalls being handed a rough draft of the OneFPA initiative, where everybody was given about 20 minutes to read through it before offering comments. Tower noted, buried near the back of the proposal behind some exciting language about all the ways that the chapters would benefit, an incidental mention that the Denver office would take over management of each chapter’s finances. “I distinctly remember when it was my turn to comment,” he says, “my comment was: Oh, so you’re trying to take the chapters’ money. When it was rolled out to the entire organization,” he says, “a lot of people had a similar response.”
But once the problematic aspects of the initiative were set aside, Tower says that the Advisory Council has precipitated an important shift in the FPA’s overall functionality.
Meaning? One of the criticisms of the FPA, for literally 20 years, was that there was never a healthy communication between the chapters and the home office, because there seemed to be no easy way for the chapters to get the attention of the Denver staff leadership. “When I was a leader at the chapter level,” says Tower, “that was one of my frustrations. I would tell Lauren [Schadle, then-FPA CEO], and David Brand [then-Director of Strategic Operations], Hey, we’re in the same city. My office is half a mile from yours. How are we not communicating when we’re all in the same dang town? As the chapter president,” he adds, “I reached out to them and tried to have more communication, and it almost seemed like they thought the members were a necessary evil.”
Whenever there was communication, he says, it was top-down, in the form of edicts from Denver. “I don’t think the staff leadership had a really good understanding of what the chapters were dealing with in the trenches,” says Tower.
The Advisory Council is changing that in a systematic way. The current process is for the Advisory Council to send out a message to each of the chapter leadership teams, 30 days in advance of a meeting. “We’ll say, here is the topic we’re looking at, and here are the questions we would like you to go back to your board and have a discussion about, and come back and be able to discuss this among ourselves,” says Tower. There would be breakout sessions, and then the group would reconvene and offer feedback that would be delivered to the home office.
“I think the great part about the Advisory Council,” says Tower, “is that any time you are in a new group of people, there is often a little hesitancy to be the nail that sticks up, to raise your hand and provide a dissenting opinion. It has been wonderful to see, this year, how willing people are to offer their opinions. We always focus on trying to catch the verbatim responses,” he adds. “And try to convey what the chapters are actually saying, rather than some paraphrase that is coming from us.”
What, exactly, was conveyed? “After we finally got organized in the latter half of 2020,” says Tower, “we started hearing from our advisory council reps exactly what I was hearing from my chapter leadership team: that we have a lot of challenges with membership. We were struggling with some serious attrition.”
The first and most basic recommendation that came out of those initial meetings was that the FPA needed to formally, and finally, define who was its core member, which would help define the services that would be delivered from the home office and through the chapters.
“Most financial planners have an ideal client,” Tower explains, “and they know the services that are needed by that ideal client. I think there was a feeling at the chapter level that there was some disconnect about who the FPA’s core target customer was, and what we were going to be delivering to those people to justify paying their membership dues.”
The idea of defining a core member of the FPA requires some courage, because by definition it moves the focus off of the broad penumbra of non-core members, and risks losing them. There is evidence that the FPA leadership had been acting in fear of alienating anybody who might consider joining and paying dues, despite the fact that the original agreement, from the merger of the IAFP and ICFP, was that it would primarily focus on CFP practitioners.
It should not be a surprise that, after meetings between Mahoney and the Advisory Council, this emerged as the definition of the core FPA member—its target client, so to speak. “These were conversations that should have happened at FPA in the past, and I don’t know why they didn’t,” Mahoney concedes. “But going forward, we define our core member as the certified financial planner, full stop.”
Mahoney is quick to add that anyone involved in the financial planning industry is welcome to become a member. “That is never going to change,” he says. “But 65-70 percent of our members happen to be CFPs, and the data analysis shows that our retention rate for that specific group, the CFP professionals, has been climbing all year long. That means that the members of the FPA who happen to be CFPs are renewing at a faster clip than they have in the past.”
Going forward, the association’s marketing efforts will be aimed directly at CFP practitioners. The membership benefits will be primarily oriented toward making their lives easier, and more convenient, and highlighting in the press and elsewhere their importance as professionals in the personal finance landscape. A revised website and revised social media campaign will focus on the FPA’s value to that cohort.
“We’re going to highlight how we’re helping them with benefits to round out their practices, and giving them learning opportunities, and making them aware of the advocacy efforts that we’re pursuing,” says Mahoney. He adds that Retreat is still on schedule as an in-person event in April, and a reconstituted (details to come) 2022 national conference in Seattle is scheduled to be in-person as well.
Defining exactly what that core audience wants from the FPA is a surprisingly tricky issue. Tower says that he was initially attracted to join the association, early in his career, because he was fired up about an advocacy issue. Today, as a more experienced business owner, he says that one of his primary member benefits is the group disability insurance he can buy through the FPA, which costs a fraction of what he would have to pay on his own. “It more than pays for my annual membership, many times over,” he says.
Of course, others are attracted to the community and sense of connection that Mahoney referred to earlier. But Tower doesn’t believe that ‘community’ should be the sole focus. He makes the point that only about a third to a fifth of FPA members actually attend local chapter meetings, and fewer still are trekking out to the national ones.
“Not everybody joins the FPA for the same reasons,” he cautions. “With 18,000 members, you are going to have some diversity about why people join the organization. I think we have to be cognizant of the fact that there are lots of reasons, and maybe some of the reasons why people joined the FPA in the beginning are not the reasons they stay in the FPA. Being able to communicate broadly a wide variety of member benefits, I think, is going to be really important.”
The turnaround is going to take time, but the first steps have been taken. Tower believes that the FPA is a different organization than it was 18 months ago, and he expects the shift to translate to membership growth and retention going forward. “The biggest thing that has changed, in my mind,” he says, “is that when I was a chapter leader, it felt very much as if it was us vs. them, chapters vs. national. National was very disconnected from what we were doing at the chapter level, and what we were trying to accomplish. Today,” Tower adds, “when we talk about what is happening in the FPA, it is all ‘we,’ as in ‘we, together’ need to accomplish these things. If we have a membership attrition issue, well, national is not going to solve that by themselves, and the chapters are not going to solve that by themselves. Going forward, we have to solve it together.”
Of course, having leadership in Denver that listens to chapters and members, having a routine mechanism for vetting and debating core issues broadly across the chapters, defining the core membership and shifting the focus from benefiting the association to benefiting the membership—these, Mahoney recognizes, are nothing more than a good beginning.
“What we’ve talked about so far are the really basic meat and potato issues,” says Mahoney; “the nuts and bolts of any good membership organization—making sure we’re relevant and providing good value to our members.”
Then he repeats his mantra: “I am very much taking a windshield approach at the FPA, and we are focusing on building things up and out.”