A former president of the Financial Planning Association said the organization stumbled in the way that it dismissed its chief executive Lauren Schadle last week.
The FPA announced on Friday that Schadle would leave immediately after working 20 years for the organization, including the last eight as chief executive. She has been replaced on an interim basis by Patrick Mahoney. There was no reason given for her exit.
Paul Auslander, who was president of the FPA when Schadle was hired as CEO in 2012, said the board did her a disservice by dismissing her without explanation within a few months of the expiration of her contract at the end of the year.
“The board is perfectly within its right to make a change,” said Auslander, director of financial planning at Provise Management Group. “But the manner in which you do it matters. In this case, it was handled poorly.”
Schadle’s abrupt departure makes her look bad and raises questions about the circumstances, Auslander said.
“I can’t imagine anyone more honest and forthright than Lauren Schadle,” said Auslander. “She is as honest as the day is long.”
He said the struggles FPA is facing with declining membership and an internal governance struggle with its chapters also can be laid at the feet of the board.
“If they’re firing her, they better fire themselves,” Auslander said.
FPA President Martin Seay would not elaborate on Schadle’s exit.
“There’s no particular instigating incident,” Seay said in a phone interview.
In a written statement, he added: “Lauren was a fine leader who competently led our professional staff and served FPA with dedication.”
Seay, an associate professor of personal financial planning at Kansas State University, said Auslander doesn’t know the workings of the current board.
“Paul is a valued member of FPA who served as President in 2012 during a CEO leadership transition himself,” Seay said in a statement. “While he has not served on the board since 2013 and is not privy to the board’s current deliberations, he is entitled to his own opinions and perspectives.”
Schadle did not respond to a request for comment.
Her tenure at FPA was marked by a couple of setbacks. Its membership has declined from about 24,000 in 2018 to about 21,000 today. She also presided over tensions between FPA chapters and FPA headquarters about the direction of the organization.
In a series of Twitter posts on Friday, Michael Kitces, head of wealth strategy at Buckingham Partners, speculated that Schadle was fired and endorsed the move.
“This. Was. Long. Overdue,” Kitces wrote.
He criticized her for FPA’s membership loss and its “misguided focus” on restructuring. That effort, known as OneFPA, originally involved dissolving local chapters.
“The question now will become: what’s next for the FPA, and can it recover from the lax fiduciary oversight of its own board of directors that allowed the same CEO to preside over 8 years of negative growth and a potentially catastrophic failed rollout of a crucial reorg?” Kitces tweeted.
In April 2019, the FPA backed away from the idea of getting rid of local chapters. In January, it began a “beta test” of a new governance structure.
Auslander said FPA was “making progress in fixing the chapter system” but “unfortunately, it wasn’t soon enough” to save Schadle.
Seay also said OneFPA was advancing.
“Lauren played a central role in working with the board of directors to design the OneFPA Network vision and worked with our outstanding professional staff on its execution until this point,” Seay said in a statement. “We have already seen the fruits of that labor through the first five months of the OneFPA beta-test where we have seen an increased amount of collaboration between FPA and the 11 beta-test chapters.”
The FPA board is often activist and can hamstring the top FPA executive, a problem that Schadle likely encountered, Auslander said.
“Sometimes that activism is simply obstructing progress because they can’t make a decision,” he said. “Lauren did as well as could be expected working with the dynamics she inherited.”
The FPA is conducting a search for Schadle’s replacement, which should take about four to six months, Seay said.
The group is looking for someone who has experience in association management. Mahoney’s background at the Institute of Electrical and Electronics Engineers is one reason he was tapped for the interim chief executive role.
For now, FPA must help its members during a time of significant disruption caused by the coronavirus outbreak, Seay said.
“It’s really important that we’re responsive to our members’ needs,” he said.