NAIFA Pushes Controversial Bylaws Change

The National Association of Insurance and Financial Advisors plans to retool and remain king of the mountain.

But it needs the acquiescence from membership to implement a sweeping plan to streamline the organization, which has lost more than 75 percent of its membership since its heyday in the early 1990s.

Developed by the Quality Member Task Force, delegates were scheduled to vote on the plan Sunday, during the final day of the NAIFA Performance & Purpose 2017 Annual Conference. However, that was before Hurricane Irma forced NAIFA to cancel the conference.

The board has a conference call planned and will decide by the middle of next week on how to reschedule the business meeting and the vote, Sheila Owens, vice president of communication and marketing for NAIFA, said Friday.

NAIFA once boasted about 140,000 members, said Paul Dougherty, NAIFA national president.

Today, the organization is still larger than the next association in the financial services space – but membership is about 30,000.

The board’s proposal of a new set of NAIFA Bylaws includes three main goals:

1. Creates a NAIFA federation structure with chapter relationships between national, state and local affiliates.
2. Establishes standards for successful NAIFA associations that all are accountable for at the national, state, and local level.
3. Move to one consistent dues amount nationwide.

Change is Inevitable

NAIFA is nearing the point where change is inevitable, Dougherty said.

“The question is whether or not NAIFA looks different in the future based on our recommendations to take positive steps or if we simply let it change due to atrophy,” he said. “We’ve lost over 20 percent of our local organizations since 2010. It was simply due to the lack of resources at the local level, in both volunteer strength, as well as the financial resources to be able to keep those organizations going.”

The details are where the changes become clear. Under the federation structure, each state NAIFA chapter would manage the administrative functions for all NAIFA affiliates in that state.

That means doing and filing tax returns and purchasing DNO insurance, Dougherty said. As it stands, NAIFA has 517 different entities performing separate administrative functions.

“This would give us a chance to pool the administrative resources from a financial level moving forward,” Dougherty said. “There was often a great deal of duplication.”

The dues change is also a big issue. Present membership costs can be a detriment to prospective members who may pay local, state and national dues, Dougherty said.

If the changes are adopted, “the dues will be set by the NAIFA national board and there will be one dues rate for the entire organization,” he said.

In an exception to the new changes, NAIFA is willing to allow autonomous affiliates with their own tax numbers in metro areas, Dougherty explained.

“They would still coordinate with the NAIFA national and the state, but it would allow them to have a business entity based on certain criteria,” he said. “Size in the beginning, but eventually on their ability to deliver successful programming to their members.”

2012 Effort Failed

NAIFA similarly tried to reform the bylaws in 2012. That effort was met with pushback from the local affiliates.

“Frankly, we didn’t follow the same type of process in terms of garnering the support from folks around the country,” said Dougherty, who joined the board in 2010.

The organization held two public comment periods from April to July and received hundreds of comments, Dougherty said, “many of them favorable and some of them not so favorable.”

If adopted, the new NAIFA bylaws will be effective Jan. 1, 2019, and the federation will work together towards implementation between now and 2019.

How the vote will go remains unknown, Dougherty said.

“None of us want to see NAIFA shrink,” he said. “Although it’s different and this is a change in the way we’ve done it in the past, this is the right way to go moving forward.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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