Value Added: The Benefits of Working Together

Fierce competition among associations with similar interests is out. Collaboration is in. Working together makes dollars and sense, as three organizations in the finance industry discovered when they joined forces to attract members and leverage opportunities.

If you haven’t noticed how crowded the association pool has become in the past several years, well, you probably haven’t been paying attention. From agriculture to aerospace, multiple organizations compete for the attention of both their current members and potential new ones.

That competition will only increase in the coming years.

Still, if you are part of a field where other associations vie for your slice of the membership pie, there’s no reason to engage in guerrilla tactics against your like-minded peers. In fact, many associations have found value in sharing the field with others—whether it’s collaborating on events or even splitting back-office operations.

But before an association can be a good partner, it must have a strong identity. And these days, says Sarah Sladek, founder and president of XYZ University and author of The End of Membership As We Know It, that means finding your place in the market so potential members understand your value.

When it comes to competitive advantage, niche is the new black.

Better Than the Rest?

When Sladek consults with associations, she often asks their leaders to list all their member benefits. She also asks which ones are exclusive to that particular organization.

“Nine times out of 10, people walk away from that exercise with only one member benefit that passes the test,” she says. Networking, for example, doesn’t hold the same influence it once did, because in a world saturated with social media, videoconferencing, and instant messaging, you can network with anyone in the world, anytime. And advocacy isn’t exclusive, because those efforts will yield benefits that can be enjoyed by an entire industry, not just members.

“Associations are having to take a hard look at how to compete,” Sladek says. “They have to think about what makes the association better or best at one thing.”

Among the increasingly crowded sectors is the one covering financial planners and advisors. “I think each one has its sweet spot,” says Ellen Turf, CEO of the National Association of Personal Financial Advisors (NAPFA), based in Arlington Heights, Illinois. “Each one of us offers something different.”

Turf, who will step down this year after 21 years at NAPFA, says one of the board’s goals is to look at future membership and determine “who should be our tribe,” she says. “We don’t typically do membership drives. A lot of it is by word of mouth, but we still feel it’s important to look at who should be the NAPFA member.”

She says she understands the value of working with competitors, and NAPFA has been talking to the Financial Planning Association (FPA) about doing more of it, particularly when it comes to education and events. “It’s a time when people are weary about how they are spending their money,” she says. “Both organizations want to give their members as robust and deep an experience as possible at the conferences. If you are offering a conference, it’s got to be worth someone’s time out of the office. They need to see the value of going.”

There are a lot of unique and creative ways to collaborate, but it only works if you have something of value to begin with.

Keeping Afloat in a Crowded Pool

Two smaller players in the financial services field are the nonprofit Alliance of Cambridge Advisors, Inc. (ACA), in Highland, Michigan, and for-profit Garrett Planning Network, based in Kansas City, Missouri. Like NAFPA, both serve fee-only advisors (which means members can’t sell products or collect commissions), and both help financial planners run their businesses. So from a potential member’s perspective, they might look like competitors, says Cathy Stegmaier, ACA’s executive director. “But I don’t see it that way. Our members operate under very different models, and a financial advisor will just be naturally drawn to one model or another. If a person is drawn more to one, that’s where they should go, because they won’t be happy with the other.”

ACA, for example, focuses on holistic financial planning, and its members tend to work with clients long-term, while Garrett members work with clients largely on an hourly basis. Garrett’s philosophy is that services should remain accessible; its members’ clients aren’t required to have a certain net worth, for example.

“To some degree, maybe I’d consider ACA a competitor, but at the same time, it comes down to a business decision the planner is making,” says Justin Nichols, Garrett’s manager of operations. “We really focus on different aspects of the market and take different approaches to financial planning.”

Both organizations work closely with NAPFA. ACA requires its members to belong to the larger organization, and Garrett encourages it. Stegmaier says most of her members go to at least one of NAPFA’s annual conferences, and they also participate in the association’s webinars, such as one in January on how younger financial advisors can establish trust with clients who are decades older. Meanwhile, ACA offered a webinar called “Working With and Marketing to Emerging Professionals” that some NAPFA members attended. ACA members frequently speak at NAPFA conferences, and the two groups cross-promote events.

More Muscle When It Counts

Neither ACA nor Garrett has the staff or budget for any advocacy heft, so they both look to NAPFA and FPA to fill that role. One of the best examples of collaboration is the Financial Planning Coalition, made up of NAPFA, FPA, and the Certified Financial Planner Board of Standards. The coalition advises legislators and regulators on how to best protect customers.

At its best, collaboration is a way to provide members with additional services and to streamline operations. Sladek says she has seen associations with similar audiences collaborate in various ways, from sharing a receptionist to rolling out membership promotions (if you join Organization A, you get a discount on joining Organization B).

“There are a lot of unique and creative ways to collaborate, but it only works if you have something of value to begin with,” Sladek says. “Otherwise, you’re not talking about collaborating; you’re talking about merging.”

She predicts that the more watered-down associations won’t survive long. “The new generations want a return on investment and a work-life balance,” she says. “So, anything that doesn’t provide value—people will disengage.”

Knowing their competitors aren’t going away anytime soon, both ACA and Garrett say their current challenge is becoming better known and getting the word out to potential members. ACA is focusing this year on rebranding, developing a social media strategy, and possibly even adopting a new name that better describes what the organization does.

“It’s a crowded field, but there’s a lot of people out there who call themselves financial planners,” Stegmaier says. “There’s more than enough to go around. And all these organizations share the commitment to helping financial planning become a true profession, so the consumer knows and can identify who a financial planner is, and who they can trust.”

melanie d.g. kaplan writes regularly for the Washington Post and is a contributing editor at Smart Planet/CBS Interactive.


Melanie D.G. Kaplan

By Melanie D.G. Kaplan

Melanie D.G. Kaplan writes regularly for the Washington Post and is a contributing editor at Smart Planet/CBS Interactive. MORE

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