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Incoming NAPFA head looks to keep advisers from growing up, out of group

Incoming NAPFA chairman William Baldwin is looking to find ways to keep firms involved in the 2,150-member organization once they get larger.

“People have been growing up and out” of the National Association of Personal Financial Advisors since it began in 1983, said Mr. Baldwin, who will succeed Diahann Lassus as chairman in September.

“That was something that was frustrating everyone — the fact that we were losing members,” he said. “It’s a great organization and still is for the new adviser, but not for the long-standing adviser.”

When Mr. Baldwin, president of Pillar Financial Advisors of Waltham, Mass., which manages $700 million, first joined his regional NAPFA board in 2004, he campaigned on a platform of reaching out to serve larger firms better. He started by conducting focus groups at regional and national conferences.

NAPFA, based in Arlington Heights, Ill., previously had focused on basic training for new firms, and as they developed into larger companies, they saw less need to belong, Mr. Baldwin said.

“We have found we have begun to attract firms which are not just new planners starting up. Previously, we couldn’t get firms that had started outside of NAPFA,” Mr. Baldwin said.

“It’s sort of a slow process, but we’ve seen some progress in that,” he said. “We want to make sure it keeps going.”

The focus-group studies showed that members want better information about benchmarking for fee-only firms, Mr. Baldwin said. Benchmarking studies on advisory firm profitability previously had been done on financial planning firms in general.

In addition, the managing-information exchange program that Mr. Baldwin helped establish in 2004 “is thriving,” he said. Some 25% of NAPFA’s membership is involved in NAPFA Mix, which provides members with information on practice management, marketing strategies and client services.

Over the coming year, Mr. Baldwin wants to “go back and re-poll the various bands of the membership to find out how the organization can better serve them,” he said.

One area on which he wants to focus is coordinating educational offerings to make NAPFA a primary resource for all financial planning firms, whether they are fee-only or not.

“They need reasons to come back,” Mr. Baldwin said. “This issue is a big deal.”

NAPFA officials who met with the media last week at their national conference in National Harbor, Md., also stressed the need to reach regulatory and congressional officials to gain support for a professional regulatory organization dedicated to financial planning and raising standards for advisers who provide financial planning. Some 525 members attended the conference.

The Financial Planning Coalition, which includes NAPFA, the Financial Planning Association of Denver and the Certified Financial Planner Board of Standards Inc. of Washington, has called for such an organization.

The coalition is at odds with the Securities Industry and Financial Markets Association, which has offices in Washington and New York. SIFMA has called for a “harmonization” of standards for financial advisers.

“They’re not a strong supporter of what we’re doing,” said Ms. Lassus, president of Lassus Wherley & Associates PC of New Providence, N.J., which manages $250 million.

“We think a single, robust national standard would be easier to understand for investors rather than today’s bifurcated system,” SIFMA spokesman Travis Larson wrote in an e-mail. “We think it makes sense to consider using existing regulatory infrastructure, rather than creating a wholly new and different organization.”

Coalition members have been meeting with members of the SEC and congressional staff to advance the case for a professional organization, Ms. Lassus said.

“There is interest,” she said. “They’re all looking for a better way of protecting consumers, especially after [the] Madoff [scandal].”

Ms. Lassus, of course, was referring to Bernard L. Madoff Securities LLC of New York, through which the disgraced financier conducted a massive Ponzi scheme that came to light last year. “If ever there were an opportunity for us to be at the table, it’s today,” she said.