FPA's MetLife sponsorship raises eyebrows about its relationship with the fiduciary foe

FPA, which has championed a uniformed fiduciary duty, is joining with an insurance giant

Apr 24, 2014 @ 12:12 pm

By Carl O'Donnell and Mark Schoeff Jr.

The Financial Planning Association's acceptance of a sponsorship from MetLife Inc., a leader of the insurance industry, which historically has butted heads with the financial planning community over the issue of a uniform fiduciary standard, has confounded some in the advice arena.

“This is a real conflict of interest for the FPA in advancing a true fiduciary standard,” said David O'Brien, the owner of O'Brien Financial Planning and a former FPA member. “This is the largest body [in the Financial Planning Coalition] and they just took money from the other side.”

But Janet Stanzak, 2014 president of the FPA and principal at Financial Empowerment, said the agreement will in no way affect the organization's position on the uniform fiduciary standard.

“FPA is not changing our values,” she said. “This partnership has nothing to do with our position on fiduciary duty.”

Typically, fiduciary advocates and the insurance industry have been on opposite sides of the long debate over whether anyone providing retail investment advice should be required to act in the best interest of their clients at all times. Insurers in general have been skeptical of a universal fiduciary duty regulation, arguing it would increase regulatory burdens and compliance costs for their advisers. Critics say that the industry doesn't want fiduciary duty to apply to high-commission products like annuities.

“Our sponsorship of FPA is about fostering growth, diversity and professionalism among our advisers,” said Paul LaPiana, senior vice president of MetLife Premier Client Group. “It also helps us advance our goals of providing support and thought leadership within the financial services industry."

The sponsorship, which began April 1 and promises MetLife “high-profile, year-round exposure to more than 23,000 FPA members though several online, print and in-person” events and mediums, is effective for one year.

MetLife stands to benefit from this relationship in part because the company is trying to put more focus on comprehensive financial planning, said recruiter Jon Henschen, president of Henschen & Associates.

Beyond the financial benefits of sponsorship, FPA could also benefit from an increase in membership, thanks to an influx in advisers from MetLife Inc., said Dan Candura, president and chief executive of PennyTree Advisers.

“They're always looking for ways to grow local chapters, and this is a way to be supportive of that,” he said.

Mr. Candura said that this relationship is consistent with the notion that FPA is a “big tent,” providing a forum for people with different perspectives from throughout the industry.

“I think it's a good move. You cannot tell me that insurance is not a key component of financial planning,” said John Lefferts, a consultant and former president and CEO of Lion Street Financial. “Insurance is part of any financial plan.”

While it's unlikely that either party is going to change their position on the uniform fiduciary standard, according to Mr. Henschen, some agree that that might be a good thing.

“This partisan bickering has got to stop,” Mr. Lefferts said. “It doesn't do any good for the industry.”

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