What NAPFA stands for is a key issue today, at a time when many advisors are moving toward fees, undercutting the organization's uniqueness. Kanaly took the helm just as the group was embarking on a strategic plan to redefine itself and was moving beyond the "fee-only" label. The strategy also entails heightening public awareness of what NAPFA members believe in.
Concurrently, Kanaly and the rest of NAPFA's leadership are laying plans to increase membership, restructure the way the organization is governed and provide more services to members. It's a pivotal time for NAPFA, involving potentially divisive issues, such as changes in membership requirements. Nearly halfway through his term, however, Kanaly has managed to keep NAPFA happily on course, says one regional board member.
"He's certainly not an egotistical type," says Peggy Cabaniss, chairwoman of NAPFA's western regional board and a member of the national strategic planning committee. "I think he really appears to be a good leader as far as moving a group and have it be a group effort, not a Steve Kanaly effort."
That may be due to the fact that Kanaly and his two brothers, Jerry and Drew, depend on consensus to set policy at the Kanaly Trust Co., where the family patriarch, Deane, still works as chairman and chief executive officer.
As part of a succession plan hammered out a few years ago, the brothers set policy, while Murray Pate, a chief operating officer hired two years ago, takes care of the day-to-day running of the company. While the board technically is made up of Deane and his three sons, Steve says his father has let the three brothers make decisions on their own.
"We're running the company as if my father was deceased, as sort of a practice run to see how we could do if he were not here," Steve Kanaly says. "All three of us don't necessarily agree on everything, but we'll agree to disagree. If you're going to disagree, the point is you have to figure out a point to get beyond that. No one is right or wrong."
Deane Kanaly didn't envision Kanaly Trust Co. as a family business when he started it. A financial planner in the 1960s, Kanaly left the profession in disgust after a few years because of what he considered unethical practices by some of his commission-driven colleagues.
By 1973, Kanaly was running the trust department of a local bank, but the practices there irked him as well. He felt, and still feels, that trust services at banks had built-in conflicts of interests because there was too much internal pressure to steer trust clients to bank products.
The senior Kanaly still remembers a conference he attended in the 1970s, where experts predicted that banks, mutual funds, broker-dealers, insurance companies and so on would be indistinguishable someday as they melded into comprehensive financial service companies.
Kanaly believes that idea is dangerous. "It can't happen without horrendous conflicts of interest," he says.