The State of NAIFA: A ‘Purpose-Driven’ Organization

The time has come for the National Association of Insurance and Financial Advisors (NAIFA) to vigorously engage its thousands of advisors, members and the insurance carriers that support them, NAIFA leaders said.

Deeper engagement across more segments of the membership will help secure NAIFA’s future. The association represents an industry buffeted by shrinking numbers, more regulation and young consumers reticent to spend any disposable income on insurance products, leaders added.

NAIFA leaders are scheduled to speak to the organization’s National Council on Sunday during the NAIFA 2015 Career Conference and Annual Meeting in New Orleans. But the association’s new CEO, Kevin M Mayeux, spoke with InsuranceNewsNet prior to the start of the conference to discuss the state of the organization. Mayeux took the reins of NAIFA on July 1 after the death of Dr. Susan Waters in December.

“NAIFA has to be open and willing and nimble enough to change to meet the evolving needs of its membership now and in the future,” Mayeux told InsuranceNewsNet.

He said the organization would proceed with finding new ways to increase membership and develop new revenue streams.

Revenue from membership dues for the year that ended Aug. 31 was $10.7 million, a drop from $11.3 million in 2014, Mayeux told InsuranceNewsNet.

Mayeux estimates that within five years NAIFA can generate between $3 million and $5 million a year from professional development programs and another $2 million to $5 million from sponsorship of industry research, NAIFA-produced white papers, advertising and show exhibits.

Membership, which has been dropping for more than a decade, stood at 40,540 as of June, Mayeux said.

But that membership decline appears to be turning around.

Mayeux said membership currently stands at 43,000 thanks to a new pilot program launched in April. “We had membership growth for the first time in 22 years,” Mayeux said.

“So we have a solid engagement plan to make sure those new members see value and that we retain them after the trial membership period expires,” he said.

NAIFA leaders point out that the state of the organization — a long-term drop in membership and lower revenues — need to be considered within the context of a shrinking industry marked by fewer advisors and carriers.

Besides, many nationwide advocacy organizations also have lost members.

Shrinking long-term membership and revenues isn’t particular to NAIFA, although NAIFA leaders say they also expect the U.S. Department of Labor’s proposed fiduciary rule governing retirement accounts to flush still more advisors out of the industry and into retirement.

At its zenith in 1993, NAIFA had as many as 140,000 members, but NAIFA officials say dues were less expensive then. “We like to say we have 250,000 members but only 40,000 pay dues,” NAIFA president-elect Jules O. Gaudreau Jr. said.

There’s little doubt, though, that NAIFA leaders have recognized the need to tighten the bolts holding together an organization that had over the years become rickety in places, due in part to its loosely stitched network of local and state affiliates.

NAIFA’s blueprint to strengthen those bonds and engage advisors is contained in research labeled “Advisor 2020,” which outlines a framework advisors can use to build their practices in a changing environment.

Full-day Advisor 2020 workshops are available nationwide.

“NAIFA members are 20 percent to 40 percent more effective and productive than nonmembers with the same companies due to sales ideas and techniques and awareness of the marketplace,” Gaudreau also said.

NAIFA leaders realize that their industry is buffeted by a shrinking workforce, the rise of fee-only planners, stiffer competition from banks and broker/dealers, changing technology, emerging agent and consumer demographics, and more stringent regulatory requirements. As a result, the organization’s leadership knows all too well that the advisors it represents require a robust advocate to help them.

NAIFA leaders also pointed to the restructuring of the association’s National Membership Committee. This move brought more resources to state and local associations and strengthened the organization’s ties with diverse membership segments: corporate partners, independent financial advisors, general agents and registered investment advisors.

“We have most of the channels built out,” said NAIFA president Juli Y. McNeely, who will cede the post to Gaudreau for 2015-2016 on Monday. “The diversity channel is really starting to take off, we have a little more work to do.”

She also said NAIFA is still looking to build teams within the respective audience channels to grow out the NAIFA membership. “We’re close to being built and I think we just have to add a little meat to the bone,” she said.

There’s no question that NAIFA provides value.

Financial advisors make their voices heard in Washington thanks to NAIFA’s Congressional Conference, which has brought more than 700 advisors to Capitol Hill in each of the last three years, according to McNeely.

The revamped Life Underwriter Training Council Fellow (LUTCF) designation, which was in danger of losing ground, held its first courses this summer, breathing new life into NAIFA-sponsored training and professional development programs.

McNeely, the outgoing president, said the crux of the growth initiatives is to make all advisors —regardless of age, gender or ethnicity— feel connected to one another and to their professional “parent” so that NAIFA is a place they can call home.

She said NAIFA had “moved the bar in that process.”

Exhibit A in that department: McNeely herself.

“When I first started at NAIFA nearly 20 years ago, there were very few women and very few young advisors,” McNeely said. “That is no longer the case. I see women and I see people who are younger and that immediately makes me feel a sense of connection.”

Only 14 percent of NAIFA members are women. McNeely and her fellow NAIFA leaders acknowledge they have more work to do before every advisor feels at home in NAIFA’s far-flung structure of state and local associations.

But the outreach conducted by NAIFA over the past year or two speaks for itself: the latest membership numbers are on the rise.

Gaudreau said NAIFA initiatives on the revenue side of the income statement would be matched by commensurate efforts on the expense side.

That means members can expect NAIFA to implement disciplined business procedures, rely on industry-standard metrics to track performance, move away from deficit spending and generally approach its future as a fiduciary operation.

From now on, NAIFA intends to be a “purpose-driven operation,” Gaudreau said.

 

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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