How Financial Associations Are Failing Us All #2-Promoting Political Agendas, Not A Personal Plannin
How do you know you’re being subjected to someone else’s political aims?
They tell you what they’re doing isn’t political… so stop complaining.
The topic is so obvious and counterproductive that I posted a little series where I attempted to engage with a writer who made the case that he was a ‘conservative’ agreeing with a ‘liberal’ cause and so therefore was in the right and any argument against him was political.
The FPA recently did the same, and some members chimed in, saying their press release and tweets where they "slam" Republican tax ideas - while offering none of their own - and tried to write off the release saying politics were not involved.
Here are several reasons that I think should be obvious as to why that is nonsense:
1) It wasn’t based on any principle. FPA’s advocacy – from what I can tell – is based on keeping what they are doing in secret. It’s true that you probably don’t want hundreds and thousands of opinions when you run a large association (ironically, I’ve heard on calls they ask for individual opinions on every minor deduction – as if we have any power to influence anything, let alone everything – which I can only assume are just ignored, wasting everyone’s time), but, you want to have something in the open that guides your actions.
Unless you want to reserve the flexibility to make your own decisions. If there is a guiding principle, it was not to address an issue which would increase financial planning.
2) There were arguments from planners that I think the FPA probably again did he easy thing and just ran with about how their release kept “choice.” Well, if we wanted to keep choice and increase access to planning and good investment choices for the public in college investing (rather than watching college accounts giving conflicted and risky 529 plans a monopoly) the obvious removal of choice is the removal of Education Savings Accounts.
The ‘choice’ that was kept was the choice of boomers to take a special deduction not available to the rest of the public, often at the time when they are earning the most, so the deduction is worth the most. It was the choice to pass a tax bill for extra savings to another generation. Let's be honest with what it is since we're talking about being the informed ones in the time of a public awakening.
Their children will already pay for their Social Security and other benefits that accrue most to the elderly, and will not receive these benefits. I assume an association should first approach deductions fairly, rather than used to push for what may be seen as deductions that benefit their highest income clients (and themselves).
Picking and choosing who benefits via state power is… politics. Fail on choosing a topic that wasn’t political.
3) The association left it to a volunteer to explain their rationale, which I feel terrible about writing a blog about, but since FPA keeps its advocacy agenda to itself it places volunteers in the firing line. The only comment from the employee head of advocacy was a dismissive comment that ‘we understand all of the issues.’ This was more than the silence I expect though.
Dismissing rational arguments, and taking the attitude "I do what I want"... kind of political.
4) One item shared was that the FPA wanted a voice in the tax reform conversation. They’ve known about it for a year, but I assume waited until the last minute (no planning Financial Planning Association!), had no ideas, and picked the easiest item they were opposed to and attacked in order to have a ‘voice.’
In that conversation I kept hearing a similar word in that conversation that is all politics – fight. We need to enter the fight, and maybe this was the wrong issue, but we’re fighting the good fight. I pointed that out the volunteer who said it. I suppose I’m attune to it since I see it regularly from political extremists in our profession today who consider it most important to oppose and attack politicians who have been relatively weak in making any changes, rather than advance our interests with politicians who seem at least willing and able to consider them.
I see little need to fight for policy positions. I think you need to argue for them using reason and logic from an unbiased and principled position.
The press release from FPA was tame, if arguing with hyperbole that the government ‘helps’ people to save and would ‘harm’ savers without a discriminatory deduction. It doesn’t help or harm anyone’s ability to save, let alone people with $24,000 discretionary income that can go to saving (although, the planner in me sees many in retirement who are harmed by using pre-tax savings, paying more in retirement than their working years). But, the social media not only resent the "FPA slam" article - which did nothing but restate the press release, so it wasn't necessary - it rewrote the words so that the "slam" words came from teh FPA.
If you see the people you need to convince as your enemy and you pick random topics unrelated to your mission to attack… you’re engaging in politics.
The only thing that has made sense to me over the last year watching FPA ignore the unlevel playing field between robo and 401(k) sponsors and their own members is that the FPA is at the highest levels driven by sponsorship dollars which are probably the only area they can focus on and grow.
There was a recent article I may use next time titled Your 401(k) Is Kinda B******t which discusses some of the issues I've mentioned that have caused immense harm to savers who need a planner. Nothing ever is mentioned about the need to expand access to planning from FPA.
We harm our long-term viability when the public is noticing just how conflicted the 401(k) system is and is actively asking questions about that system, yet the ‘professionals’ that claim to be interested in promoting sound finances defend that system at all cost. The author is right, it’s BS that your money goes to a monopoly provider who you aren’t the client of (your employer is), and who cares nothing more than getting more of your assets in that plan.
The Financial Planning Association should be on the side of these people since its members are. However, from the very little I can gather on its advocacy from the few items journalists have managed to find out about it, it spends more time on ‘easy’ issues like this, ones that were as likely to go away as not. Another example is the constant messages about how they are opposed to states when they may propose income taxes on our services and proposing regulations on us rather than lobbying for items in our interest – like competition in college and 401(k) investing – which would be in everyone’s interests, not just the high-income advisor and saver.