What was NAPFA thinking?

By requesting the resignation of Bert Whitehead from the compensation committee soon after he made public his opposition to the practice of charging lower fees for the management of cash and some bond allocations, the National Association of Personal Financial Advisors suggests it can't stand disagreement in its upper ranks. NAPFA chief executive Geoffrey Brown claimed Mr. Whitehead's forced resignation had nothing to do with the substance of his comments on fees but rather with his sharing with the media research he did for the committee.

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As a result, Mr. Brown said, the board had “lost confidence in his ability to meet the demands of his assignment on the compensation committee,” whatever that means. In explaining himself, Mr. Brown acknowledged that Mr. Whitehead was under no formal confidentiality agreement with NAPFA or the compensation committee. Huh? He was not under a confidentiality agreement, yet he was supposed to keep quiet. That story is not exactly convincing, especially as NAPFA board chairman Robert Gerstemeier did not respond to requests for comment. That made it look as if Mr. Gerstemeier was ducking hard questions. Mr. Brown suggested that the group might incorporate into its thinking some of Mr. Whitehead's ideas on a tighter fiduciary standard. But it seems that, overall, NAPFA did not like the results of Mr. Whitehead's research because it did not support the group's preferred position. If NAPFA disagrees with Mr. Whitehead's research, it should explain and prove how the research is wrong, and be open to debating him publicly. And it should learn to tolerate disagreement in its policymaking bodies. If not, other NAPFA members will think twice about serving on its committees.