According to a report by Reporter Greg Iacurci in this week’s InvestmentNews, The Financial Planning Association (FPA) has moved to dissolve the FPA of New York. The Association is terminating its relationship with the chapter, a nonprofit with nearly 600 members, and transferring more than $80,000 in funds to the parent organization.

Why is FPANY being fired?

Bad actors acting badly, of course. The FPA’s action comes on the heels of reports of an allegedly unethical client-solicitation scheme and retaliation taken against the member who blew the whistle.

At issue is a complaint filed with the New York attorney general’s office on March 27^th by Devika Kamboh, the New York chapter’s president, in which she described “nefarious” activities by that chapter’s board of directors and the national organization’s cover-up. Specifically, mentioned were conflicts of interest and self-dealing, as well as improperly used consumer data for their own business solicitations, which cut-out opportunities for other members who relied on the FPA’s existing client referral program.

Learn from these mistakes

When Kamboh reported the misdeeds, she was advised not to pursue the matter to avoid ill-will and to learn from these events to create more robust FPANY guidelines. When she declined, she was labeled a “troublemaker, a lone wolf, and whistleblower.” And last month, the executive committee unsuccessfully tried to vote her off the board.

The national FPA intervened and began a mediation process to resolve the issues. However, when that failed, it moved to dissolve the New York Chapter. When the dust settles and the “house is cleaned,” the chapter may be reconstituted.

Who’s overseeing compliance?

In this instance, it was the National Association’s officers and board members, and now, of course, it’s the New York attorney general’s office.

But you’re not an association. You’re a broker-dealer, RIA, or any financial industry professional. So…you’re in charge of compliance. Right? Are you overseeing compliance all by yourself? Do you have the luxury of a team?

No matter who or how many people are overseeing your organization, Patrina can help. We’ve built a business on helping organizations stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective and comprehensive, 8-module compliance solution, and compliant data capture, file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.