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NAIFA Taps Reserve for Deficit as It Fights Against Membership Decline

National Association of Insurance and Financial Advisors President Juli Y. McNeely said that boosting the organization’s membership base to about 42,000 members is a realistic goal, as NAIFA looks to recruit more deeply in the ranks of independent advisors.

 Membership is estimated at between 37,000 and 38,000 members. NAIFA officials project that the association will have to maintain a membership base of at least 42,000 by June 30 to avoid an increase in membership dues or running a budget deficit in fiscal 2016.
“It’s doable, but it’s going to take a team effort,” said McNeely, who is also past chair of NAIFA’s National Membership Committee.

As recently as June 2009, NAIFA counted 54,000 members. Annual membership dues total between $450 and $600, NAIFA said.

At the 2013 annual meeting, members voted down a dues increase, which was proposed to support future lobbying efforts. Opponents of the increase said the organization should instead focus on widening the membership base. At that time, NAIFA said it had about 40,000 members.

McNeely said people feel overloaded and have become choosy about where they devote their energy.

“People are being selective with where they spend their time or their dollars,” said McNeely, owner and vice president of McNeely Financial Services in Spencer, Wis. “It’s not anything we’ve done to push people away. People are crunched for time and choose not to belong.”

A shift away from agency distribution to the independent channel may have something to do with declining membership, as an estimated 50 percent of licensed insurance agents identify themselves as independent advisors, McNeely said.

More broadly, baby boomers, a generation of “joiners,” are slowly giving way to Generation X and Generation Y, whose members identify less with institutions and interest groups, McNeely said. Recently, though, Generation Y members have shown an affinity for belonging.

Revenue from membership dues for the year ended Aug. 31, 2014, was $11.3 million, a drop from $11.7 million in the year-ago period, according to NAIFA’s financial statements. In 2012, membership dues reached more than $12 million.

NAIFA Treasurer Matthew S. Tassey said the organization’s finances are stable, but added that dropping membership and rising expenses don’t produce a sustainable model in the long run. The board has approved a deficit budget for fiscal year 2015, which began Oct. 1.

“To avoid a dues increase, the board plans to allocate the 2014 budget surplus to offset the 2015 deficit,” Tassey wrote. “This is a short-term, stopgap solution. It is not sustainable.”
NAIFA’s future lies in increasing membership. The question is, how?

Other membership organizations that have experienced membership declines have fought back by focusing on making up the difference by mining the most profitable slivers or niches of members, or have found new members from abroad.

Because NAIFA is a national advocacy organization, recruiting from abroad isn’t a viable long-term solution, McNeely said.

McNeely said an effort begun three years ago to restructure its National Membership Team is ready to execute on a model split into separate channels.

The corporate outreach channel targets affiliated companies, the independent outreach addresses the needs of independent advisors, a field management channel is aimed at general agents, and a diversity outreach initiative reaches groups of advisors based on gender, ethnic groups and income.

A fifth channel, the direct marketing or direct mail channel, is handled through NAIFA’s national staff, McNeely said.

Henceforth, members should see a much closer coordination of how the channels reach their respective audiences so that they feel welcome and “at home” under the NAIFA umbrella, McNeely told InsuranceNewsNet.

“There are a lot of advisors out there who want a place to call home,” she said.

In the independent advice channel, membership has increased 28 percent since the restructuring. In addition, NAIFA’s Congressional Conferences have brought more than 700 advisors to Washington in each of the past two years, McNeely said.

Other initiatives include NAIFA’s Advisor 20/20 program, a workshop and research project conducted with the GAMA Foundation to help members implement the findings in their own advisory practices, and the Young Advisors Team for advisors under the age of 40 or with five years or less in the business.

McNeely also said that the relaunch of the Life Underwriter Training Council Fellow program and a new partnership with the College of Financial Planning would each develop into a “significant member play,” and that NAIFA members would begin to see the value of membership.

“It’s the time versus value debate,” McNeely said. “If you’re not getting the value, then people don’t give. But the value that NAIFA brings has grown in the past five or 10 years, and we just have to get in front of people.”


Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected] [email protected].

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