5 Reasons Why Your Wealth Management Services Aren’t Measuring Up

A recent study by Kehrer Bielan Research & Consulting shows…

First the Good News:

52% of credit union members prefer accessing all their financial service needs at a credit union.

The Bad News?

Just 3% of members use their credit union’s wealth management services.

Whether you call it wealth management, investment services or financial planning, if your credit union’s program isn’t seeing optimal results, it’s likely because you’re not making it core to the business.

The study identified 18 of the 76 credit unions they reviewed that engaged 4% of their members in an investment services relationship—29% deeper than average. These credit unions generate $2,582 in investment services revenue for every million shares in the credit union—twice the average—which contributes $538 in net profit for every million shares. That’s 56% above the average.

What are these successful credit unions getting right that you may be getting wrong?
There are Five Possibilities…

1. You’re not leveraging member trust to grow assets under management

Most credit unions focus on transactional business, such as cash management and loans, rather than their members’ long-term financial goals. Yet providing for retirement is a primary goal for member households’ savings and investments. Households that own an investment or insurance product purchased from their primary credit union are 20% more likely to have a great deal of trust in credit unions, as compared with all credit union households.

2. You’re not growing advisor headcount

The number of advisors a credit union onboards relative to its size is the single most important driver of wealth management penetration, but most credit unions don’t have enough headcount to support growth. Not only does the share of members helped by the investment services unit increase as the credit union adds advisors relative to its size, penetration increases exponentially with more coverage.

3. You’re not driving the growth of your advisory business

Charging basis points on managed assets provides recurring revenue, so advisors who build a large base can focus their time and effort on gathering new assets. Subsequently, this drives higher revenue growth for the credit union. Firms that offer incentives for advisory gather new assets 82% faster than those that don’t and produce a 2.4 times greater share of their revenue from their advisory business.

4. You’re not delivering the financial planning services member households seek

Providing for retirement is far and away the most important financial goal for member households. For credit unions seeking to capture a greater share of their members’ assets, financial planning may be the most effective tool available: Households with a financial plan obtained from a bank or credit union keep an 85% larger share of their savings and investments in those institutions.

5. You’re not increasing member awareness of your financial planning services

While 59% of members have a great deal of trust in their credit union, just 9% of households that consider a credit union to be their primary depository own an investment or insurance product they purchased there. Yet, nearly twice as many of these households (17%) own these purchased from another depository. Successful credit unions take every opportunity to position their advisors as experts and lead with wealth management in nearly every interaction with the member. Their branch and call center service reps identify prospects and make quality referrals, while their websites give wealth management prominence.

Capitalize on the Wealth Management Opportunity

Growing your credit union’s wealth management services by making it core to the business positions it for greater financial health and continued growth. Learn how you can do so successfully, while winning long-term member loyalty by visiting our resource hub.

Make Wealth Management Core

What distinguishes top-performing credit unions? They know the importance of making wealth management core. This infographic explains why – and helps you begin to understand how – you can elevate your investment services program.

Building a Strong Advisor Lineup

One of the first steps to make wealth management core to your credit union is to hire more advisors. But that’s only the beginning. Use this list of benchmarks to set your goals and move your program to the next level.

Want to Learn More?

Your credit union may be missing opportunities to help more of your members achieve financial security. Learn more about how and why you should make wealth management core to your credit union with our Best Practice Guide, Checklist, White Paper, and more. To access, fill out this quick form.

All data from “Making Wealth Management Core in Credit Unions” by Kehrer Bielan Research & Consulting, sponsored by CUNA Brokerage Services, Inc. (CBSI), February 2019. Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CBSI is a registered broker/dealer in all fifty states of the United States of America. The representative may also be financial institution employee that accepts deposits on behalf of the financial institution.