8 Questions Credit Unions Should Ask Prospective Investment Program Partners

 

How Financial Planning Services Can Deepen Credit Union Member Relationships and Benefits

Credit unions are known for genuinely caring about their members’ financial peace of mind. And yet, sometimes they miss opportunities to better serve them.

Take financial planning, for example. According to Credit Union Times, individuals invest trillions of dollars every year. And, the Pew Research Center reports that more than half of U.S. households have some skin in the stock market.

So, if your credit union does not offer investment services, you’re leaving money on the table.

Retaining members

The data indicate that many of your members are seeking financial advice and making investments elsewhere. That means lost opportunities to generate greater profits and make your members “stickier,” since research shows that consumers who have purchased an investment at their primary financial institution are 28% more likely to stay put and recommend their bank or credit union than households without an investment relationship.

Expert wealth management services help everyone achieve greater financial success. Members who use them to build nest eggs enjoy greater peace of mind and find institutions that offer them more relevant to their financial lives. And, you create an additional revenue stream and more loyal members.

Staying competitive

Offering investment opportunities also helps credit unions compete with bigger banks (and their matching marketing budgets) – something the underdogs of financial institutions must do every day to survive.

Investment programs, however, are complicated. Cost, compliance, technology, staffing and expertise are barriers to entry for most credit unions.

They make wealth management programs overwhelming to establish and manage alone despite them being a clear value-add for credit unions’ members and businesses alike. But instead of forgoing an investment program and all the benefits that come with it, find a partner who can facilitate one for you.

Partnering wisely

Remember, though, that not all resources are created equal. Before you engage a third party, be sure to consider the answers to these questions:

  1. Who manages your relationship? When choosing a partner, you want to make sure it is just that, a partnership. Often when a credit union decides to partner with a larger broker-dealer their voice can get lost in the crowd. Before committing to a new partnership be sure to understand how your relationship will work. Verify you will have direct access to top management to ensure your members are getting the same credit union level service they have become accustom to. Partner with someone who understands that every credit union is different and should have a voice in the decisions being made.
  2. Are you owned by a credit union/CUSO, and, if not, do you regularly work with credit unions and understand their members-first philosophy? Credit union relationships are built on trust. Make sure you can count on an investment partner who doesn’t undermine that. Partnering with a large broker-dealer, like LPL, may look like it has all the bells and whistles, but your members could get lost in the crowd. LPL’s mission is to work with independent contractors/financial advisors, not Credit Unions. Partnering with an established medium-sized broker-dealer where credit unions are their specialty, like Copper Financial, would allow for more personalized service and the chance for your voice to be heard to make changes that benefit your credit union.
  3. Can you work with our leadership to customize a program just for us and provide options for all our members, whether they have a few hundred dollars or thousands to invest? Most firms cater to wealthy investors, but many credit unions target audiences that might not have a lot of extra income to invest. A financial planning partner who understands credit unions will be consultative and sure to make investing options accessible to members in all stages of life.
  4. Do you have a compliance record? A history of non-compliance is, obviously, a big red flag and reason to consider a different partner.
  5. Do you have a digital platform to service our members? Look for broker-dealers that have Robo and self-directed platforms. You need to be equipped with solutions to service ALL members regardless of the amount of investable assets. Have you checked your outgoing ACH’s and how many of them are going to competitors in the digital space (Robinhood, Stash, Acorns, etc.)? Copper Financial’s digital services allow you to keep credit union assets at your credit union.
  6. Can you tie into our online banking system for a seamless, white-label member experience? Your new partner should offer a single sign-on client portal connected to your online banking platform. Members should only see your branding and access their investment information under the credit union name they trust – yours.
  7. Do you provide plug-and-play back-office solutions, including full clearing and custodial, streamlined regulatory compliance, and trust services? The answer should be a simple “yes.”
  8. What is the onboarding process? Are you fully digital? If the answer indicates that initiating the partnership will be anything but fast, easy and paper-free, you may want to keep looking. Insist on fully integrated, cloud-based technology with a 360-degree view and automation that simplifies investing for members.

Don’t let your members take their investment dollars somewhere else. A credit union-owned broker-dealer like Copper Financial, can help you capture that portion of their business to everyone’s benefit.

Securities and advisory services offered through Copper Financial Network, LLC (“CuFi”), Member FINRA/SIPC.  CuFi is a SEC registered investment adviser.  Products offered through CuFi:  are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal.