Growing Up with NAPFA

By Kevin Adler

I began work as a freelance writer and editor for NAPFA in September 1999. Membership was about 400, and the staff was made up of three people: Executive Director Ellen Turf, Director of Marketing Margie Wasserman, and Office Manager Jane Marzano.

NAPFA in those days considered itself “the mouse that roared,” a tiny organization doing battle with the largest financial services companies in the world for the good of consumers. Those circumstances haven’t changed even as the organization has grown to 10 times the size and the staff has tripled. It’s still an uphill fight every day.

Fee-Only Makes Sense

I was not familiar with Fee-Only financial planning when I was offered the NAPFA job—frankly, few people had heard of Fee-Only at the time. But the concept immediately resonated with me. It’s a revolutionary idea that gave the organization vitality and purpose that has never diminished. The revolution hasn’t fully succeeded (yet), but it’s not due to a lack of effort. NAPFA has been relentless in raising the standards in the profession, creative in providing a place for planners to share ideas and best practices, and energetic in explaining to the media why Fee-Only planning matters.

The organization’s early leaders put in immense work to define and preserve the Fee-Only line. Should people joining NAPFA from the insurance industry be allowed to receive the trailing commissions on products they had already sold, as long as they didn’t sell more? Could they sell those trails to another insurance broker before joining NAPFA? What if an individual advisor wanted to go Fee-Only, but other people in their firm didn’t? Was the firm tainted and the advisor ineligible? These are hard questions.

Sometimes, the debate reached close to parody. I recall a NAPFA conference at which members were asked to vote to strengthen the term “Fee-Only” by adopting “Only Fee-Only” or “Fee-Only Only.” Fortunately, simplicity prevailed.

Another priority two decades ago was convincing service providers such as mutual funds and insurance companies to offer products without fees. It’s hard for new members to understand how limited the options were in those days. Every new Fee-Only product or service was celebrated because it improved the ability of members to give their clients comprehensive financial planning on the road to meeting their goals. In my first years, NAPFA was on a roll as scores of companies caught on to the buzz from this rapidly growing niche.

Saving Clients from Making Mistakes

Then came the 2008–09 subprime mortgage crisis and financial collapse. NAPFA members and their clients weathered the storm remarkably well. In fact, members told me that they had an easier time with their clients during the crash than they did during the go-go years that preceded it. NAPFA members always preach caution, so when the market was booming, their clients would complain that Joe down the street just made 50% on an internet stock or flipping a condo in Miami. Why weren’t their investments doing as well? The answer came in late 2008 when those same clients called to thank their advisors for saving them from ruinous losses.

Despite individual members surviving the downturn, it was tough on NAPFA. The magazine lost 80% of its advertising, and conference attendance fell sharply. At the time, each region held a full conference each year, and NAPFA had a national event as well—five major events.

Those conference sessions were remarkable, perhaps as revolutionary as the founding Fee-Only principle. Speakers shared every intimate secret of their businesses with an openness that stunned investment brokers who came to the events to scope out whether they should switch careers. NAPFA members proclaimed that there were far more clients than they could serve, and they promised to welcome any new Fee-Only advisors as colleagues, not as competition. When you heard those presentations at which members outlined their fee structures, provided samples of their financial plans, and shared their marketing strategies, you knew they meant it. The excitement was infectious. I know several financial journalists who were so impressed with the NAPFA model that they quit writing and became Fee-Only advisors.

NAPFA adapted to the economic downturn by consolidating its five major events into two annual conferences. Yet, leaders knew it was essential to keep alive the one-on-one interaction that is the hallmark of the organization. So the board and staff expanded local groups and launched topic-based groups and, eventually, regional symposiums.

Innovation to Meet Members’ Needs

Developing those niche activities led to, in my opinion, one of NAPFA’s best innovations, the Large Firm Initiative, now the Large Firm Forum. As firms prospered and expanded, their founders encountered complex new challenges, and they proposed having a conference at which they could continue the NAPFA tradition of peer-to-peer sharing with people also facing similar issues. It was controversial at the time to offer a specific event for a subset of members; the fear was they might become distracted from the all-in-this-together feeling that had driven the organization’s success. The board approved the experiment, and the Large Firm Initiative thrived. It established the model for the conversation circles and other groups that came afterward, such as NAPFA Genesis for advisors age 33 and under, the Women’s Initiative, and the Diversity, Equity, and Inclusion Initiative. These options have strengthened—not watered down—NAPFA by meeting specific needs that members have identified. They reflect another core strength of NAPFA, which dates back to its grassroots founding: listening to its membership.

Thanks, NAPFA!

I’ll end this essay on a personal note of appreciation to NAPFA. I landed the NAPFA contract a few months after quitting a full-time job in order to become a freelance journalist and editor. I felt a kinship with NAPFA members who were giving up secure jobs and income in order to do something new and different. Just as they found satisfaction, so did I. During the first 15 years of my tenure with NAPFA, this was my largest source of income. My children were growing up at the time, and NAPFA’s contract enabled me to work from home and be very present in their lives. Whenever I spoke with NAPFA members about work-life balance, I knew this group was allowing me to achieve it.

During this same time, I built my family’s wealth, living by the rules that advisors tell their clients: don’t spend beyond your means; work with a trusted advisor; build toward long-term goals. Of course, my financial advisor is a NAPFA firm, and my parents and siblings are clients of the same company.

I’ve explained Fee-Only financial planning to my friends and professional colleagues as well. A few of them have signed up with NAPFA firms, and I think many more will now that my cohort is nearing retirement age. Like me nearly 24 years ago, all of them understand immediately that NAPFA has it right—it’s absolutely essential to have a financial advisor who’s on your side, who has only your interests in mind. That idea was the driving force behind NAPFA’s creation, and it remains the idea that inspires all of us.

Kevin Adler is a freelance journalist and editor who lives in Takoma Park, MD. He was the NAPFA Advisor's editor from 1999 through 2014 and has been assistant editor since then.