It's fair to say that TD Ameritrade executive Skip Schweiss knew his election as
president-elect of the Financial Planning Association was a bit unorthodox. But he might not have anticipated such vocal pushback from one of the
planning industry's loudest voices.
"What is the president of the FPA supposed to do if his firm calls and tries to get [the association] to change a position on something, and why wouldn't TD use every tool at its disposal from a lobbying perspective?" asked Michael Kitces, partner and director of wealth management at Pinnacle Advisory Group and co-founder of XY Planning Network.
Mr. Kitces' comments followed his Nerd's Eye View blog post last week expressing his dissatisfaction with the Mr. Schweiss' election, a post with the headline, "FPA Selects Largest Corporate Sponsor As First Ever Vendor Representative to Become National Board President"
Mr. Schweiss, 57, has worked in the financial services industry for more that 30 years and spent the past 11 years at TD Ameritrade, where he is president of TD Ameritrade's trust company and managing director of adviser advocacy.
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But Mr. Schweiss is not a financial planning practitioner, which will make him just the third non-practitioner to hold the title of FPA president in the organization's 20-year history.
Nor does he hold the certified financial planner designation, which will be a first for an FPA president when he takes over as head of the 23,000-member organization in January 2021.
Add to that Mr. Schweiss' affiliation with TD Ameritrade, which has at times taken opposing views to the FPA on key issues, and even Mr. Schweiss acknowledges the possibility of conflicts of interest.
"The potential for conflicts of interest was raised months ago," he said. "When I was considering throwing my hat into the ring for the FPA leadership, I went to TD and talked about some potential conflicts, and we made sure we had a plan and that everyone was comfortable with it."
Mr. Schweiss said those conversations inside TD were followed by a "number of conversations with the [FPA] board, and we acknowledged those potential conflicts, because they are real and you need to keep them in mind when considering your vote."
Mr. Schweiss, who has since spoken with Mr. Kitces and gives him credit for raising the issue, believes the more important issue is whether there is a plan for transparently dealing with any conflicts of interest that might arise.
"TD is a major sponsor of the FPA because we operate in this ecosystem and we're in a position to help with that, so we're not going to stop supporting the industry and its professional organizations," Mr. Schweiss said. "I'm confident any potential conflicts, should they become real, can be dealt with transparently and in a way that's in the best interest of the FPA and its members.
"It's also worth noting that being elected president of the FPA does not make me a king," he said. " There's a lot of people in that room when decisions are made."
Regarding Mr. Schweiss' employer, Mr. Kitces takes particular issue with what he describes as TD's
history of opposing the FPA on some
fiduciary issues, including not supporting efforts by the state of Nevada to impose state-level fiduciary standards.
Mr. Schweiss disagreed that the Nevada issue is evidence that TD and the FPA are on different pages.
"There are some components of that rule that would be difficult for TD and a lot of firms, where just handing a client a report could be deemed a recommendation," he said. "It was a pretty expansive view there that [TD] took concern with."
TD Ameritrade responded to a request for comment for this story with an emailed statement that reads in part, "Skip is a tireless champion for the financial planning profession and a leader known for his character and integrity. We believe the financial planning community will greatly benefit from his experience, leadership, boundless energy, and his high personal standards of conduct.
"For more than 25 years, TD Ameritrade Institutional has followed a unique strategy that makes RIAs our solution for investors seeking professional wealth management," the statement continued. "We reaffirmed our commitment to advisers earlier this year and promised, publicly and clearly, that we will not compete with RIAs. Everything we do here is designed to help advisors grow, including our steadfast advocacy for RIAs."
Frank Paré, current chair and 2018 FPA president, is less sympathetic to charges that the FPA is overlooking potential conflicts by electing Mr. Schweiss, who has served on the FPA board for the past three years.
"I don't support that belief that there are conflicts, because Skip is stepping into a role where he will be representing the FPA," said Mr. Paré, founder and president of PF Wealth Management Group.
"It's not as if Skip is serving to support the agenda of TD Ameritrade," he added. "To the extent individuals believe there might be a conflict of interest of some sort, I don't know what they are projecting into the future, however, I'm confident if there was a situation where Skip had to recuse himself, he would do that."
Mr. Paré added that potential conflicts will naturally follow any volunteer board member who also works in the industry.
"Everyone who serves in this role in one shape, form or fashion could be accused of having some potential conflict of interest," he said. "It's interesting that this has become such a big deal now."
Having enjoyed unique views of both the FPA and TD, Mr. Schweiss believes the two are more in sync on issues like fiduciary duty and the SEC's Regulation Best Interest than some observers realize.
"I personally think that has been dramatically exaggerated beyond what's real, because the FPA and TD have worked together on a lot of issues, and we have far more overlap than distinctions," he said.
On the topic of how far he would go to avoid a conflict of interest, Mr. Schweiss acknowledged that stepping down as FPA president "would be an extreme, but when looking at alternatives I generally don't rule anything out."
"I can't honestly envision a scenario where me stepping down would be the best approach, but who knows," he said. "I would put that on the table."
