Change affect small number of advisers but catches some off guard
In an effort to streamline its membership structure, the National Association of Personal Financial Advisors has dropped its provisional-membership status and now has just two levels for practicing planners.
Of the 36 existing provisional members of the fee-only adviser group, 17 were downgraded to NAPFA's financial services affiliate status and 13 were upgraded to full NAPFA-registered financial advisers. NAPFA is waiting to hear from the remaining six about which status they might qualify for.
“We're just clarifying the categories, making sure each member receives appropriate benefits based on their membership level,” said Geoffrey Brown, who took over as NAPFA's chief executive July 1.
Unlike full members, provisional members did not have to have three years of financial planning experience. The plan to drop the provisional status was “in works before I started,” Mr. Brown said.
With close to 2,500 members in total, eliminating provisional membership affected a relatively small number of NAPFA advisers.
Nevertheless, the move took some NAPFA members by surprise.
“It disappointed me,” said Tim Sullivan, founder of Clarity Financial LLC and one of the 17 provisional NAPFA members who qualify only for affiliate status.
“They should be trying to grow provisional members, and encouraging people from day one to be fee-only advisers,” said Mr. Sullivan, who plans to drop his NAPFA membership altogether.
“Apparently, some existing full members didn't think [the provisional membership] was fair,” said Brent Perry, founder of Piedmont Financial Advisors LLC and a full NAPFA member.
Notably, provisional members could take advantage of NAPFA's find-an-adviser online search function, one of the group's key benefits. Affiliate members are not included in the NAPFA database.
“For new advisers — and a lot of them are solo practitioners — that's a huge thing,” Mr. Perry said.
Mr. Brown downplayed any dispute over a two-tier status.
“I don't think that was a major part of the debate,” he said. “It's about consolidating and streamlining our membership to make us more nimble.”
The change was announced Monday and Mr. Brown said other, as yet unspecified, changes in NAPFA membership levels might be forthcoming. The organization has other membership categories, including sustaining member, academic affiliate and student affiliate categories.
