NAPFA DIRECTOR QUITS OVER FIRED EXEC: BOARD MEMBER IRKED AT BEING BYPASSED IN DECISION PROCESS

A board member of the National Association of Personal Financial Advisors has resigned — and another is expressing “concerns” — in the wake of last month’s surprise firing of the group’s president and chief executive officer.

Thomas Grzymala, owner of Alexandria Financial Associates Ltd., an Alexandria, Va., firm that manages $33 million in assets, says he resigned from NAPFA’s 10-member board after learning that Carole Badger had been dismissed by its three-member executive committee (InvestmentNews, Jan. 19).

The committee did not notify other board members before its move. “That was the straw that broke the camel’s back,” Mr. Grzymala says, explaining that the secretive ouster “didn’t agree with the business principles that I’ve practiced over the last 35 years.”

NAPFA President Mark Spangler says Ms. Badger, a lawyer who took the post last March, was let go because she was overqualified for the $100,000-a-year position and the committee had decided it wanted an “operational” leader rather than a chief executive.

Ms. Badger told InvestmentNews she was surprised by the removal and was considering her legal options.

Board member William Prewitt, owner of a Charleston, S.C., advisory firm with $14 million under management, says he has “some concerns that have been shared with other members of the board,” but he won’t discuss them until the body meets later this month. “I would like to hear a full explanation first.”

Mr. Spangler, owner of MFS Associates Inc. of Seattle, with $60 million under management, says he’s heard no other dissent. “The executive committee did what it was supposed to do. We just did our job.”

He declined to discuss Ms. Badger’s potential replacemen for the Buffalo Grove, Ill.-based organization, which represents some 600 fee-only planners.

“I have my ideas,” he says, “and I’m sure other board members will add to that.”

At least one board member is supportive.

Michael Chas
noff, owner of Advanced Capital Strategies Inc. in Cincinnati, with $100 million under management, says, “I trust that the executive committee made that decision with good judgment.”

Also on the table at the board’s meeting later this month in New Orleans is an invitation to consider folding NAPFA into two larger planner organizations.

The International Association for Financial Planning in Atlanta has approached Mr. Spangler about NAPFA’s joining merger talks between it and its 17,000 members, and the Denver-based Institute of Certified Financial Planners, which has 12,500 members.

But IAFP Chairman Peggy Ruhlin has said she doubts NAPFA will agree to any grand combination.

“NAPFA members are fiercely independent,” she noted last month. “I think that would be a hard sell.”

Other factors making the triple combo unlikely is the smallest group’s recent attempts to claim ownership of the term “fee-only” and its sponsorship of a Consumer Federation of America survey that riled some planners who don’t agree with NAPFA’s fee-only bent.