IS MERGER TALK BY PLANNING GROUPS JUST ALL TALK? NOT THIS TIME, SAY FANS OF IAFP-ICFP COMBINE; SKEPTICS, HOWEVER, PREDICT THE USUAL TURF TUSSLE

Leaders of the movement to consolidate the nation’s financial planning organizations have nixed membership for one group and expressed doubt another will want to join the industry’s big two in any merger.

The International Association for Financial Planning and the Institute of Certified Financial Planners may ask the CFP Board of Standards to join their merger discussions for informational purposes. But their leaders say there are no plans to absorb that body, which has taken a regulatory approach to the industry.

National Association of Personal Financial Advisors Chairman Mark Spangler was noncommittal about whether the 600-member group for fee-only planners would join the talks. “That will be probably a topic of discussion during the (NAPFA) board meeting” next month, says Mr. Spangler, who heads MFS Associates Inc. in Seattle.

All for one

IAFP Chairman Peggy Ruhlin has approached Mr. Spangler about his Buffalo Grove, Ill., organization joining talks between her group, which is based in Atlanta, and the Denver-based ICFP. But she doubts NAPFA would agree to merge with 17,000-member IAFP and 12,500-member ICFP. “NAPFA members are fiercely independent, and I think that would be a hard sell,” explains Ms. Ruhlin, who is a member of all three groups.

Ms. Ruhlin, a partner in Budros & Ruhlin Inc., in Columbus, Ohio, also says that in January, when IAFP and ICFP leaders agreed to begin negotiations, they discussed the possibility of inviting the CFP Board and two groups from related industries to sit in – “not to be part of the merger” but to provide input on a wide range of industry issues. The others: the New York-based American Institute of Certified Public Accountants and the American College, a Bryn Mawr, Pa., entity that provides professional training to insurance salespeople.

CFP Board officials say no invite has been extended and doubt their attendance would serve much purpose. Indeed, Janet McCallen, executive director of IAFP, says she “cannot forese
e any circumstance that the CFP Board” would merge with the membership organizations “because of who they are.” The fact the board’s role is regulatory – it oversees the awarding of certified financial planner designations – would cause conflict concerns.

As for NAPFA, Ms. Ruhlin notes it has just gone through a tumultuous year. Controversies have erupted over the association’s trademarking the “fee-only” term, its sponsorship of a Consumer Federation of America survey and the hiring of its first chief executive – who was abruptly dismissed earlier this month (InvestmentNews, Jan. 19).

Mr. Spangler says that when Carole Badger was named president and CEO last March, some members had “some concerns” about making the group’s day-to-day leadership post appointive rather than elected. He says the position was budgeted for about $100,000 a year, about the same amount that Ms. McCallen and ICFP Executive Director David Brand earn, according to IRS filings.

Ms. Badger, who last week was moving into a new Buffalo Grove condo she purchased just prior to her dismissal, says she has not determined what to do next.

The more, the merrier

Meanwhile, members of the organizations are forming their own opinions about possible mergers.

The ICFP should be an organization within the IAFP, along with lawyers, bankers, real estate professionals and CPAs, says Gib Kerr, past president of the Los Angeles chapter of the ICFP and owner of a Culver City, Calif., firm managing $3 million in assets. That would enable the IAFP to “truly become the voice of the financial services industry. They should change their name to the International Association for Financial Professionals,” says Mr. Kerr, who belongs to all three organizations.

Andrew Hudick, a former head of NAPFA who is principal of Fee-Only Financial Planning in Roanoke, Va., says he doubts the merger will fly.

“Members have been saying for years to merge” in order to eliminate duplicate dues and license fees, he
says, but the organizations consistently failed to reach a common ground. “Nobody’s acquiescing, there is no agreement to synergy; I think personalities (are) a big sticking point,” he says.

Perhaps helping this time: IAFP and ICFP are soliciting a proposal from Tecker & Associates, a Trenton, N.J., consulting firm that works with tax-exempt organizations, to help them form focus groups, conduct market research and structure the merger discussions.