Is new FPA President Jim Barnash up to the task?

The Financial Planning Association may be facing one of its most challenging years since it was formed five short years ago. Membership has dipped by some 1,000 planners in the past three years, its message regarding who it wants as a member is still a bit murky, and it has a David-and-Goliath-style fight on its hands in the form of its landmark lawsuit against the Securities and Exchange Commission.

That kind of spotlight could cause some folks to shy away from the group's top job, but not Chicagoland financial planner and veteran businessman James A. Barnash, the FPA's new president. In fact, Barnash is approaching the association's top challenges head on. He says that membership growth is his number one priority, and that the SEC lawsuit is incredibly important to planners and investors but is only the first of a number of advocacy campaigns the association should wage. As for creating a cogent, unified message that will resonate with members and prospective members alike, he says "all-inclusive and CFP-centric" can coexist.
    The fact that Barnash has built and run both small and large planning shops should come in handy. He built his own successful planning firm before selling it in 1996 and joining Lincoln Financial, where today he manages a regional planning group with six offices, 90 planners and some $1.3 billion under management.
    "I think the world of Jim," say Norm Boone, who just finished a three-year stint on the FPA's board of directors. "He brings a larger business management perspective than the FPA has historically had. It's a big and kind of unwieldy organization. And having people with some management perspective is more important than some people believe. Frankly, one of the reasons Jim wound up running unopposed was primarily because I decided not to run. I thought the association was in very good hands with Jim."
Barnash's experience in championing fees and commission planning will also benefit the organization, says Boone. "Officially, the FPA has not taken a fee-only stance, but there are folks who aren't fee-only who have felt left out. For whatever reason, it has happened and it's important that if the FPA is going to succeed and be a voice of the financial planning industry, both sides have to feel represented," Boone adds.
    "Jim has more depth and breadth than most," says Marv Tuttle, FPA's executive director/CEO. "He's the only one I know of who has brought both small-business and large-firm experience to the table. Still," says Tuttle, "one of the toughest challenges for Jim this year will be to champion patience in terms of the demands that will be placed on the FPA to succeed quickly."
The fact that Barnash is more conciliator than brawler, and is able to make various and divergent groups not only happy but productive, started to dawn on peers about five years ago. That's when Barnash took a hand in helping meld the diverse chapters of the Institute of Certified Financial Planners and International Association for Financial Planning into the largest FPA chapter in the country.
    Things weren't always collegial, folks who were there say. Back in early 2000 when the merger was announced, the respective members were disgruntled, they weren't talking and they certainly weren't building a successful FPA chapter..
    But Barnash changed that. "There was no template for the mergers at the local level, so a lot was rushed to the altar, here in Chicago as well." says Mike Ryan, president of Paragon Asset Management in Wilmette, Ill., and a two-time board member of the ICFP. "The two camps didn't know each other and it was fractious at first, as it was in many states. But Jim got them together and talking, and they started to listen and gain respect. He's the reason the Illinois chapter is the largest in the country today," Ryan says.
    Another key reason for Barnash's success? "He doesn't have a big ego," says James A. Morris, executive director of the central region of Lincoln Financial Advisors and the guy who picked Barnash to succeed him a few years back. "There are people who go into a leadership role at an organization where it might be more about them and less about the organization. That's not Jim," says Morris. "He wants to help the people he works with grow. That's especially critical at the FPA, which is an all-volunteer army."

When we had a frank discussion with Barnash himself about the pending SEC lawsuit, the need to grow membership and shore up member confidence, here's what he had to say:

Financial Advisor: How defining is the FPA's lawsuit against the SEC, and how much will it cost?

Jim Barnash: If the first months of the year are any indication, it will take up a lot of my time. We're hearing from our attorney that at the top end the cost would be about $150,000. I don't know how that would change depending on what the SEC comes up with in April. But we've taken that into consideration and we have money set aside for it. We've found a lot of our members, and nonmembers, are cheering us on. The SEC has already gotten 1,700 responses and after all that, they're still asking for more comments?
    They've seemed to say that if the advice is discretionary, then you have to be a fiduciary. The fact is you can do a lot of damage or good with or without discretion. But this is really one of the first of many issues you'll see FPA take a stance on. We're about our members and the public. And we can't help them without sticking our necks out. Whether it's about the need to sue the SEC or being at the table of the Social Security debate, we think the FPA is a great resource for our government and we're moving forward.

FA: When it comes to regulation, the FPA has been toying with the notion of advocating a self-regulatory organization for years. Where do you stand on that?

JB: We have a committee coming together this year that will make recommendations to our board regarding regulation, from state licensing to self-regulation. The white paper we put together a while back was just the starting point.

FA: So the FPA will make actual recommendations regarding the efficacy of an SRO?

JB: My hope is yes.

FA: How about the FPA's PAC (political action committee)? If you want a higher profile in Washington, D.C., won't you have to put some dollars behind your message?

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