NAPFA’S 40TH ANNIVERSARY

 
Building Trust in the Wild West of Financial Planning 

By Mary Malgoire

In the year of our 40th anniversary, NAPFA is delighted to share this history of NAPFA’s origins.In this article, we hear from Mary Malgoire, a founding member of NAPFA and its first female chair.

To understand NAPFA at its birth in the 1980s is to understand being at the forefront of an important, new movement. We called the organizing meeting of NAPFA the “Continental Convention.” It was a very exciting time. At that meeting, I was appointed to NAPFA’s first board of directors because I raised my hand and asked, “Why are there no advisors who are new to the business on the board of directors?” My life changed in 15 seconds. It was the Wild West.

Needless to say, back then, the financial planning industry had just a handful of Fee-Only advisors in it. Planners from other organizations laughed incredulously when we described how we worked with and charged clients. We did not command the respect that we have today. The early leaders of NAPFA, myself included, were highly suspicious of the intentions of our colleagues in the industry. We knew they wanted to preserve a way of doing business that we in NAPFA found distasteful, if not downright immoral. But we knew that the consumer was on our side, cheering for our success. And the media, with stories about this righteous new approach to financial advice, drove consumers to our doorsteps. My recollection is that most new clients were suffering from some form of financial loss … reeling from the total loss of a $25,000 limited partnership or having had their account churned or an investment portfolio weighed down with loaded mutual funds. It was a heady time to be a Fee-Only financial advisor.

I served on NAPFA’s board for many of its early years. Leadership’s challenge was to put together an organization quickly, despite having few financial resources. But the early leaders were passionate. While we only had 30 to 40 members at the time, we quickly had to define who could become a member. … Could they have any amount of commission income, like trails from selling insurance many years ago? We had to organize annual membership meetings. We spent a fair amount of time challenging parts of the CFP^® curriculum as inaccurate. And, of course, we found ourselves correcting misinformation about Fee-Only planners (that our fees were exorbitant or that we were best suited for wealthy investors) and following up with journalists who had left NAPFA out when recommending advisors to consumers.

My challenge as chair in 1987 was to bring the various parts of NAPFA’s far-flung membership together to all row in the same direction. The West Region’s members didn’t know (or trust) the East Region’s members and vice versa. I solved this problem by steering “vocal locals” toward national board leadership. Later, NAPFA would organize regions and support local leaders as a source of national leadership. Brilliant!

I retired in 2018, but I look back with satisfaction at the sheer good fortune of my life. Every day brought a unique problem to solve. I was intellectually challenged. I hung out with the smartest people in the business. I helped people achieve precious financial security (and they said “thank you”!). But most important of all is that I was a small part of a big movement that has changed the business of personal financial advice forever.