Credit unions are seen as an opportunity for financial advisors

Credit unions present a huge opportunity for financial advisors to build a client base, according to Rob Comfort, president of CUNA Brokerage Services, a Waverly, Iowa-based wealth management firm.

Only about a sixth of the 6,000 credit unions in the United States offer optional wealth management services and of those 1,000 only about 2% of credit union members take advantage of the service, Comfort said. Yet more than 50% of credit union members said they would like their credit unions to offer financial planning services.

Credit unions are the financial industry’s most underleveraged opportunity for advisors,” Comfort said in an interview. “Credit unions are the next big opportunity for advisors to offer their services, in part because the credit union movement is growing and so few members have access to wealth management services. Members have critical needs for the services counselors provide.

“There are several reasons why credit unions have such low penetration rates in wealth management,” he said. “Historically speaking, credit unions have mostly focused on the businesses they know best – the traditional loan and deposit balance sheet businesses. They’ve also had far too few advisors, and when they have services available, they often don’t have a polished approach to getting the word out among members. [found] at CUNA Mutual Group, and studies have shown that when a member has a wealth management relationship, it also helps generate more loans and deposits. »

CUNA Brokerage Services provides investment brokerage and advisory services and planning services to retail investors.

Advisors who partner with credit unions “grow their business almost faster than they can handle it,” Comfort added. In addition, “more and more credit unions are extending their services to wealth management because it helps them fulfill their core missions” to meet the financial needs of members, which go beyond savings and loans. . “Right now, many credit union members turn to others for wealth management services or their needs go unmet.”

Offering wealth management and financial planning services helps the credit union build loyalty and grow the market for other services it provides, which generates fees for the credit union, he added. The 1,000 that provide this service tend to be the largest credit unions.

CUNA Brokerage Services, which is a subsidiary of the CUNA Mutual Group, an 85-year-old provider of financial services to credit unions and their customers with a particular focus on the affluent masses, recently joined the LPL platform.

Credit unions have two primary missions, providing a savings venue for deposits and authorizing loans, “but without wealth management, credit unions cannot do legacy planning, retirement planning, or provide d ‘other services,’ Comfort said. “Credit unions are known to help people of all income levels. Only about 500 advisors work with credit unions now. We want to reach a wider audience. »

“The blueprint for credit unions that decide to offer wealth management services is to have the optimal number of advisors to serve all members,” Comfort said. “We want to help credit unions market their wealth management services.

There’s a general perception in the counseling world that credit unions don’t have the sophisticated tools that counselors want, but that’s no longer true, he added.

CUNA, the Credit Union National Association, is an advocacy organization for credit unions.

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