FPA terminates relationship with New York chapter amid allegations of ethical lapse, retaliation

The Financial Planning Association has moved to dissolve the FPA of New York following a dispute in that chapter’s executive ranks stemming from an allegedly unethical client-solicitation scheme and retaliatory activity against the whistleblower of these activities.

The organization’s executive committee notified the FPA of New York’s board of directors on March 22 of its intent to dissolve the group and transfer its funds, which amount to more than $80,000, according to a complaint filed in late March with the New York attorney general’s office and reviewed by InvestmentNews.

The dissolution amounts to a termination of the Financial Planning Association‘s relationship with the FPA of New York, a nonprofit with roughly 600 members, which puts it among the top 10 largest of the group’s 86 affiliates; however, the legal entity itself still exists.

“We can’t tell the New York entity not to exist, but we can tell them not to represent FPA,” said David Brand, chief operating officer of the national FPA.

Mr. Brand said the chapter would go through a “leadership transition” and the FPA would ultimately seek to “reconstitute” the relationship.

‘NEFARIOUS’ ACTIVITIES

The complaint, filed March 27 by Devika Kamboh, president of the Financial Planning Association of New York, described “nefarious” activities among the New York chapter’s board of directors, and said the national FPA organization found “an underhand and sneaky way to hide the systematic breach of ethics.”

Ms. Kamboh claimed the FPA of New York violated several internal policies, including conflicts of interest and self-dealing, improperly used consumer data for solicitations, and retaliated against her as an officer and organization member after bringing the issue to light.

Ms. Kamboh said she discovered “multiple incidences” in late 2017 through March 2018 whereby some current and past board members and officers of the FPA of New York — including current chair Anthea Perkinson — “conducted prohibited solicitations of clients” at public-awareness events hosted by the chapter. Some members of the executive committee distributed participant attendance surveys from the events among themselves afterward to use for potential client prospecting without the knowledge of Ms. Kamboh or the FPA of New York membership at large, according to the complaint.

That not only circumvented a client referral program already in place, but represented a conflict of interest and violated the group’s mission of being an educational institution “whose policy is not to use the organization to directly solicit clients,” Ms. Kamboh claimed.

Ms. Kamboh reported the issues to other officers of the FPANY executive committee, who indicated she shouldn’t pursue the matter “in order to avoid ill-will and hostility,” according to the complaint. She then reported it to Mr. Brand of the FPA, who “suggested [she] overlook these potential conflict-of-interest violations” and use the matter as a “learning experience to set more robust FPANY guidelines,” the complaint alleged.

Mr. Brand declined to comment on these claims. Ms. Perkinson didn’t respond to a request for comment.

Ms. Kamboh is asking for intervention from New York attorney general Eric Schneiderman due to concern over “further retaliation” against her as a whistleblower and about the “FPA’s misleading the membership without giving them information, the right to vote on what they want, or a right to their funds.”

She filed the complaint with the New York State Department of Law Charities Bureau, which has jurisdiction to review complaints concerning nonprofit organizations and determine whether action from the attorney general is warranted.

The complaint also said Ms. Kamboh was a victim of discrimination and gender bias, and called out the national FPA organization for having “failed to protect [her] as a woman of color from a hostile FPANY Board.”

Ms. Kamboh’s legal counsel is also in the process of filing a formal complaint with the Equal Employment Opportunity Commission.

Ms. Kamboh and her attorney, Martin Asatrian, declined to comment for this story.

FPA spokesman Ben Lewis said the organization takes allegations resulting from the activities of FPA volunteer leaders and members “very seriously” and “does not tolerate discrimination of any type.”

“We are committed to working with FPA of New York leaders to explore the circumstances surrounding these allegations,” Mr. Lewis said. He declined to comment on specific allegations due to the potential for legal action.

‘TROUBLEMAKER’

Ultimately, Ms. Kamboh claimed she was labeled a “troublemaker, a lone wolf and whistleblower” who faced a “hostile board” when taking over as president of the New York chapter in January. In March, the executive committee unsuccessfully tried to vote her off the board by “threatening and bullying other board members” to vote against her as ongoing retaliation, the complaint said.

The national FPA organization intervened March 16 by calling for a mediation process to resolve outstanding issues, according to a letter sent by the FPA leadership to the New York chapter’s board of directors. That letter acknowledged the chapter’s “challenges” and called the situation “traumatic” for some on the New York board.

Ultimately, the mediation process failed, leading to FPA’s dissolution decision, according to documents attached to the complaint.

“Effective immediately, FPA will take over the operations of FPA of New York to ensure that FPA’s New York members continue to be served,” a March 22 communication to the FPANY board of directors said. It put Scott Kahan, former FPA of New York president, in charge of the transition.

Mr. Kahan sent a letter to FPA of New York members and sponsors on April 2 saying, “In the coming weeks and months, a chapter leadership transition will occur.” He didn’t provide specific details.

“In managing the affairs of a complex organization like FPA, sometimes changes in volunteer leadership must occur to better meet the needs and the requirements of service to members,” Mr. Kahan wrote. “Such is the case for the FPA of New York.”

The FPA of New York didn’t respond to a request for comment.

Related Topics: Financial Planning Association (FPA)