An embarrassing lapse over the timely registration of his RIA has led National Association of Personal Financial Advisors Chair-elect Ron Rhoades to part ways with the board, although details of that parting were unclear this morning.
Rhoades (right), an attorney and professor who chairs the financial planning program at State University of New York in Alfred, was due to take over as NAPFA chair on Sept. 1. In a letter he released to the media late yesterday, Rhoades said NAPFA had decided “to move on without me serving as chair in the coming year.”
In a separate statement released late yesterday, NAPFA said Rhoades had resigned from the board and as chair-elect. Current Chair Susan John will continue to serve until a special election is held next month, the statement said.
Rhoades’ letter says he missed the deadline for properly filing registration papers on his RIA with the state of Florida. He told me in the spring that his firm, ScholarFi Inc., was a small operation with $25 million in assets and about 20 clients.
In the debate in Congress this year over Dodd-Frank rules governing oversight of RIAs, Rhoades has been an outspoken critic of the proposal that FINRA take over that role. His frequent Tweets on the subject (his handle is @140Limited) were tart and unambiguous; he called for FINRA’s abolition and said investors were better served by greater RIA oversight by the SEC.
Rhoades has been on the NAPFA board for three years. Rhoades’ letter and the NAPFA statement follow. We’ll have a full story on the news on WealthManagement.com later today.
To Interested Members of the Press:
Over the past several weeks I discerned that I and my firm (of which I serve as Chief Compliance Officer and President) had committed a compliance violation by failing to timely file registration papers with the State of Florida Division of Securities.
My firm was formed in September 2011 as a state-‐registered firm in New York. At the time of formation, the firm accepted a total of 11 clients from Florida, which exceeds the de minimis threshold for registration in the State of Florida (which is five clients). I had considered in the late summer of 2011 whether to register in Florida, but mistakenly believed that I could wait until the first quarter of 2012 to register with the state.
Registration documents were submitted to the state in February 2012, but in late May 2012 I was made aware of my mistake. Since then I have undertaken candid disclosures of all requested facts to the state, and I await their final determination of this matter.
While my mistake was unintentional, the violation of compliance regulations is nevertheless material in nature. The mistake made was mine, and mine alone. I accept full responsibility for my personal mistake, and all consequences that may flow therefrom, including the decision by NAPFA to move on without me serving as chair in the coming year.
Sincerely, Ron A. Rhoades, JD, CFP®
President, ScholarFi, Inc.
NAPFA Statement on Ron Rhoades:
Arlington Heights, IL– The following statement is from the National Association of Personal Financial Advisors (NAPFA) on the decision by Ron Rhoades, JD, CFP® to resign from the NAPFA Board:
“It is with regret that Ron Rhoades has resigned from the NAPFA Board and as Chair-Elect. This decision was made after Ron disclosed that he had committed a compliance violation by failing to timely file registration papers with the State of Florida Division of Securities. Ron informed NAPFA of this violation and the National Board has decided to move on in 2012-13 without Ron as the Chair. To fill the vacated Chair position on NAPFA’s National Board, the Board will hold a special election next month. Until that time, Susan John, CFP® has agreed to continue on as Chair until the special election is held.”