First Command Financial Planning, Inc. is a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), all 50 states, and the District of Columbia. It is a member of the Securities Investor Protection Corporation (SIPC). First Command is recognized in the financial planning industry as an FPA Alliance firm, one of only two companies ever to receive this elite recognition from the 27,000-member Financial Planning Association.
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History
Business Model
First Command provides personalized services through locally based trained and licensed Financial Advisors and through its Home Office in Fort Worth, Texas. The company offers advice on securities, with an emphasis on mutual funds, annuities, life insurance, and municipal funds (including Section 529 Plans). Through related companies it offers insurance and banking products and services.[2] As of December 31, 2009, First Command had more than 285,000 client families, $14.7 billion in managed assets, $51.7 billion in life insurance policies in force and $615 million in banking assets.
The company has a long history of working with military officers. In 2004, a U.S. Securities and Exchange Commission (SEC) report noted "The great majority of the firm's agents are former commissioned or non-commissioned military officers." The report was part of the proceedings in reaching a settlement with First Financial over charges that the firm "willfully violated the Securities Act of 1933 Section 17(a)(2) dealing with inter-state fraud" in marketing financial instruments to veterans.
First Command provides complimentary financial plans for all active duty U.S. military service members. Currently, there are more than 473 Financial Advisors at First Command, 71% of whom are veterans or military spouses. First Command states its Mission as "coaching those who serve in their pursuit of financial security."
Early years
First Command was founded in 1958 by Carroll Payne, a retired military officer who realized that military families needed assistance in planning for their financial futures. Payne wanted to create a company that recognized and dealt with the unique circumstances applicable to United States military personnel.
The company began as a broker/dealer called United Services Investment Association Inc. (USIA), which later became United Services Planning Association Inc. (USPA). USIA's membership in the NASD (now FINRA) was approved on Jan. 21, 1959. In 1963, USPA began offering financial plans to its clients, designed to promote long-term saving and investing. Dollar cost averaging and a pay-yourself-first approach were also used to encourage clients to invest on a regular basis. In the mid '60s, USPA expanded its product offerings to include life insurance, leading to the creation of the Independent Research Agency for Life Insurance, Inc. (IRA).
In 1970, USPA and IRA began operating under the combined name of USPA&IRA, a name which remained in use for the next three decades.
International expansion and corporate growth
In 1979, the company opened its first office outside the continental U.S, in Hawaii; three years later international operations began with an office in Germany. A charitable foundation, now known as the First Command Educational Foundation, began in 1983.
Payne died in 1984 and was succeeded by Ralph Smith, who served as chairman and CEO until his retirement in December 1985. George Talley then served as chairman and CEO from 1986-1991. During Talley's tenure, USPA&IRA grew to 500 advisors and exceeded 200,000 families. Lamar Smith, company president and COO, was promoted to chairman and CEO in 1992.
First Command Bank opened for business on April 21, 1997. In less than six months, the bank was posting more than 100 new deposit accounts and 50 new loans weekly. In 1998, USPA&IRA went "private," transitioning from a C Corporation to an S Corporation and later, in 2002, become 100% employee owned. USPA&IRA launched a tax services program in 2001.
Name change to First Command
USPA&IRA changed its name to First Command Financial Planning in 2001. The company explained that it changed its name because:
We are sometimes confused with other companies that service the military and former military clientele and whose names also start with letters "US...". There are several such companies, but none like us and we don't want any confusion.
Becoming Registered Investments Advisors
In anticipation of an SEC ruling requiring that all firms whose primary business is financial planning must become a Registered Investment Advisor (RIA), First Command filed with the SEC to become one in the spring of 2005. This requires their agents to obtain additional training and certifications. As RIAs, the agents could now use the term "Financial Advisors" as compared to "Registered Agents", with the former being held to a higher ethical standard. The higher standards require agents to document every client interaction in great detail and apply due diligence to all investment recommendations to ensure they are in the best interests of the client. The company no longer offers the controversial systematic investment plans.
Assistance from The Secretan Center
In April 2007, The Secretan Center announced a strategic initiative to assist First Command in the "continuing, expansive transformation" of the organization. The Secretan Center is a global consulting practice specializing in cultural and leadership transformation. First Command contracted with The Secretan Center for research, coaching and other services designed to "help achieve a cultural transformation that will raise the level of inspiration of all clients, financial advisors and employees and implement sought-after corporate changes and outcomes." Dr. Lance Secretan, founder of The Secretan Center, said:
We are excited and inspired to accompany First Command Financial Services on its journey of organizational change. First Command is regenerating itself, moving assertively in a bold, new direction. The Secretan Center is committed to helping them in every way we can because their values and their hearts are in the right place.
Also in 2007, First Command introduced Tailored Professional Services, a fee-based planning program.
Recognition as FPA Alliance firm
In 2009, First Command was recognized in the financial planning industry as an FPA Alliance firm, one of only two companies ever to receive this elite recognition from the 27,000-member Financial Planning Association. In an April 2009 announcement, FPA President Richard Salmen said First Command was being recognized for its "commitment to professionalism in financial planning. ... First Command has publicly demonstrated a commitment to putting their clients' interests first. The company has registered with the SEC as an investment adviser and all of its financial planners are registered as Investment Adviser Representatives under First Command's RIA. And, First Command has met the program requirements, including adherence to the principles of professionalism for FPA Alliance. The firm has a strong commitment to lifelong learning and leadership development."
Partnerships
First Command has partnered with several organizations that support military veterans and their families. These include Hiring Our Heroes, Project Sanctuary, the Association of the United States Army, the Marine Corps Marathon, Army West Point Athletics, and the Department of Defense Military Spouse Employment Partnership.
Charity Involvement
First Command established the First Command Education Foundation (FCEF). The FCEF is a 501(c)(3) non-profit public charity dedicated to improving financial readiness through education and scholarship opportunities. FCEF has been providing its services since 1983.
Corporate Structure
Leadership Team
In January 2007, First Command Board of Directors announced that they were separating the Chairman of the Board and CEO functions. Lamar Smith, who had held both positions since 1992, relinquished the Chairman of the Board and remained Chief Executive Officer. Jim Lanier, a former President and COO and 20-year board member of First Command, became the Chairman of the Board.[25] In April 2007, the First Command Board of Directors announced that CEO Lamar Smith was departing to become Chairman Emeritus. Chairman of the Board Jim Lanier assumed the role of interim CEO and Scott Spiker took over as the company's new Chief Executive Officer on Sept. 1, 2007. Spiker had held top leadership positions at Norwest Corp., RBC Dain Rauscher, Definity Health, Stanton Group and Destiny Health.[26] The rest of the board includes Mark D. Steffe as Executive Vice President and National Director of Advisor Operations, Michael F. Morrison as Executive Vice President and Chief Financial Officer, Hugh A. Simpson as Executive Vice President of General Counsel and Secretary, W. David White as President of First Command Bank, Jill Lyttle as Executive Vice President of Human Resources and Leadership Development, Jerry Wackerhagen as Executive Vice President of Operations and Technology, and Luis A. Muniz, CFP® as Senior Vice President of Advisor Services.
Governing Board
The Board selects the senior executive team, which is charged with the ethical conduct of the company's business. The Board acts as an advisor and counselor to senior executives and monitors their performance. In addition, the Board ensures that high ethical standards are an essential element of, and are reflected in, First Command's everyday culture. The board is led by James N. Lanier, chairman of the board and J. Scott Spiker, chief executive officer. Other board members include VADM (Ret.) Jody A. Breckenridge, Mark C. Brickell, Logan Dickinson, Henry G. Hagan, ADM (Ret.) Robert E. Kramek of the United States Coast Guard, GEN (Ret.) Dan K. McNeill of the United States Army, Paula Meyer, Carroll H. Payne II, Mark D. Steffe, and John H. Wilson.
Military Advisory Board
The First Command Military Advisory Board is a select group of retired senior flag officers and senior enlisted leaders from the nation's military services that advise First Command on how to best serve the interest of their valued military clients. This 10-member board is committed to providing First Command with independent perspective and advice on important issues, such as serving not only the financial needs of clients, but to take an interest in their overall success and health. Members of the board include SMA (Ret.) Jack L. Tilley of the United States Army, Lt. Gen (Ret.) John F. Sattler and Sgt Maj (Ret.) Alford L. McMichael of the United States Marine Corps, VADM (Ret.) Barry M. Costello and Master Chief (Ret.) Charles Clarke of the United States Navy, Lt. Gen (Ret.) Glen "Wally" Moorhead III and CM Sgt (Ret.) Kenneth J. McQuiston of the United States Air Force, and VADM (Ret.) Sally Brice-O'Hara and MCPOCG (Ret.) Charles "Skip" W. Bowen III of the United States Coast Guard.
First Command Financial Behaviors Index
First Command has developed the First Command Financial Behaviors Index. It assesses trends among the American public's financial behaviors, intentions and attitudes through a monthly survey of approximately 530 U.S. consumers, ages 25-70, with annual household incomes of at least $50,000. The survey includes active-duty service members in pay grades E-6 and above. Survey results are regularly reported on by national news organizations including the Wall Street Journal, The New York Times, McClatchy-Tribune News Service, USA Today and Financial Planning magazine
Financial Planner Oath
In the Spring 2010 issue of First Command's Journey magazine, the company reiterated its commitment to the FPA Alliance program with the introduction of The Financial Planner Oath. Resembling in part the Hippocratic Oath, the document is intended help members of the financial planning industry publicly state their commitment to act in their client's best interests at all times. The Financial Planner Oath is provided to new First Command Financial Advisors as part of their training, and the document is made available online to financial planners at other firms free of charge as a public service.
Affiliated companies
First Command Financial Services, Inc. parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Securities and brokerage services are offered by First Command Financial Planning, Inc., a broker-dealer. Financial planning and investment advisory services are offered by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are offered by First Command Insurance Services, Inc. in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank.
Criticism and controversy
In 2004, a New York Times investigative report by Diana B. Henriques named First Command as being one of several investment firms engaged in deceptive marketing of financial instruments aimed at military veterans. On 15 December of that year, the U.S. Securities and Exchange Commission (SEC) determined that First Command had "willfully violated the Securities Act of 1933 Section 17(a)(2) dealing with inter-state fraud" in its marketing activities targeting veterans. In particular, the SEC concluded that First Command had sold mutual fund investments to veterans termed "systematic plans" that bore very high sales charges termed "front-end sales loads", "by, in part, making misleading statements and omissions concerning, among other things: (a) comparisons between the systematic plan and other mutual fund investments; (b) the availability of the Thrift Savings Plan ("TSP"), which offers military investors many of the features of a systematic plan at lower costs; and (c) the efficacy of the front-end sales load in ensuring that investors remain committed to the systematic plan."
In an independent investigation, the National Association of Securities Dealers (NASD) charged First Command "with inappropriately confronting a customer who complained, failing to maintain e-mail, failing to maintain adequate supervisory systems and procedures and filing an inaccurate Form U-5 regulatory report".
In December 2004, First Command entered into a $12 million settlement with the SEC and NASD without admitting guilt. As part of the settlement, First Command agreed to offer restitution to all clients who had purchased and sold a systematic plan between 1999 and 2004, establishment of educational programs, and monitoring or prefiling. People who had not terminated their systematic plan were not covered in the settlement. In September 2007, a California judge granted "Class Action" status to a 2005 lawsuit filed by systematic plan holders whose plans were active when the SEC issued its ruling on December 15, 2004. In October 2008, attorneys for the plaintiffs sought court approval for a settlement. The settlement was approved by the court in April 2009.
As of August 2006, Mary Shapiro, the NASD Vice-Chairman and President of Regulatory Policy and Oversight, continued to be critical of First Command, calling it an "unscrupulous organization" with an "awful" product. First Command's new president, Marty Durbin, responded to her criticism by stating, "It's unfortunate that settling these charges still doesn't mean it's behind us. But it's a futile effort to try to fight negative press and so we decided not to put a lot of energy that way."
Current operations
First Command Financial Services, Inc. announced In June 2013 that it is offering banking support to its clients who have been impacted by the Black Forest Fire near Colorado Springs. In February 2015, with the threat of a government-funding crisis, First Command Financial Services offered to cover Coast Guard pay in the event of a funding crisis. With a new military retirement system being enforced, First Command's CEO Scott Spiker offered his perspective to the Spring 2016 issue of Journey "I believe there are legitimate concerns about whether this structural reform of military retirement will really be in the long-term best interests of future service members," Spiker said. "It almost assuredly will not be in the long-term best interests of those service members who fail to grasp the importance of taking full advantage of the Thrift Savings Plan and making smart, informed decisions about the new lump sum bonus opportunities and other key military benefits. This is not, in other words, a time for service members and their families to passively assume that their financial future is set."
Awards and Recognitions
- In December, 2016 First Command Financial Services was ranked as one of the Best Places to Work in Texas by Texas Monthly, the Texas Association of Business, Texas Society for Human Resource Management and Best Companies Group.
- In August, 2016, First Command Financial Services was awarded the Silver Bowl Award for the Best Use of Social for Recruiting by LIMRA and LOMA.
- In November 2015, First Command Financial Services was named a top employer of military veterans and spouses by Victory Media, publisher of G.I. Jobs and Military Spouse magazines.
- In January 2016, Fort Worth Business Named First Command Financial Services as the Best Large Company to work for in Fort Worth.
- In May 2016, First Command Financial Services won the Most Valuable Employers (MVE) for Military by CivilianJobs.com.
Other
- In 2006, First Command introduced long term care and property and casualty insurance.
- In December 2006, First Command announced it had signed on as a corporate partner with the Bell Helicopter Armed Forces Bowl.
- On July 4, 2008, ABC's Good Morning America featured a story on a First Command sponsored charity the Package Brigade that sends care packages to troops serving in Iraq and Afghanistan.
- In September 2007, Samantha Hilliard, First Command district advisor was featured in Newsweek. Hilliard received the 2007 realLIFEstories Client Service Award for her service to the widow of an Army officer killed in Iraq. The award was presented by the Life and Health Insurance Foundation for Education (LIFE), a non-profit group dedicated to providing the public with information and education on life, disability, long-term care and health insurance.
- In summer 2008, the U.S. Department of Defense and the National Committee for Employer Support of the Guard and Reserve honored First Command with the Patriotic Employer Award, which is presented to companies and individuals for contributing to national security and protecting liberty and freedom by supporting employee participation in America's National Guard and Reserve force.
Source of the article : Wikipedia
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