Bellco CUSO has big investment year, up 38%

<p>By JIM RUBENSTEIN CU Times Southwest Correspondent DENVER – It’s been quite a year indeed for the CUSO staff at the $1.1 billion Bellco Credit Union here. For one thing, Bellco First Financial Services, the CUSO, racked up a stunning 38% increase in investment income for the first 11 months of 2001 as compared to a year ago. Despite “difficult economic conditions” even before Sept. 11, the Bellco CUSO had “one of the top producing investment programs in the country,” boasted Doug Ferraro, president and CEO of the $1.1 billion Bellco CU. The CUSO, which provides investment, insurance and trust services to 130,000 members and non-members, recorded an increase of $270,000 from January through November from the comparable period a year ago with a forecast that investment income will top $1 million by yearend. “Yes, we’re quite pleased that we’re No.2 this year only behind Hewlett Packard,” said Scott Jentz, program manager for the CUSO and president of a Denver CU consulting firm advising Bellco. Jentz was making a reference to the No.1 CU investment performer, HP Credit Union CUSO, of Palo Alto, Calif., which ranked No. 1 in the broker dealer program administered by San Diego-based CUSO Financial Services. Both HP and Bellco are members of that program. In fact, HP Employees has been the “No.1 credit union program for the past three years,” according to Valerie Seyfert, president of CFS, as the broker dealer firm is known. Peter Snyder, president and CEO of Addison Avenue Financial Partners, the HP CUSO based in Roseville, Calif., acknowledged the Bellco success as a relative newcomer to CFS having joined the system last February. Snyder said it is his understanding that Bellco, like HP has successfully integrated investment activity with other service sectors in the CU. HP received headlines last May when it was named the CUSO of the Year by the National Association. of Credit Union Service Organizations and was also recognized for having returned a $1 million dividend to the CU. The market decline, said Snyder, has brought down net income this year to $250,000. Gross income for HP this year is expected at $5 million, down from the $7 million in 2000. As for Bellco, Jentz attributed the program’s success to “strong marketing support” given to the program by top management at Bellco. He said a recent direct mail campaign to employees concerned about their 401K and stock portfolios worked well and the “automated” nature of the CFS setup has turned out successful. There are five CFS reps, he said located in 10 Bellco branches. Particularly noteworthy, noted Jentz, is that Bank Investment Marketing in its December issue picked two Bellco CFS reps, Mike Alexander and Thomas Kim, among their “Top 50 Bank Reps” in the nation. The article noted that Alexander’s client base has grown “50% to 780″ and his production also up 50% “despite the difficult market environment.” Kim also saw his assets under management climb 23.9% to $24.8 million and his client list double from 450 to 800. In a press release announcing its CFS performance, Bellco noted that October was “the highest month for production since the inception” of the program with gross dealer concessions of $478, 918. The second highest product month was August with $413, 485. Seyfert of CFS said one reason for Bellco’s success is that in February it became one of the CU owners of CFS. Seyfert said traditionally CUs have taken an “arms length” approach to investment vendors but through the ownership model CUs have a more urgent stake in its success. Also, officials point out, the payout is greater through ownership. Seyfert said her firm works hard to “lower the total cost of investment for the CU member” making it more competitive than “the broker down the street.” CFS, she said, offers no-fee IRAs (no set up or maintenance fees) no inactive account fees and no postage or handling fees for confirms. The CFS program, she concluded, “is designed to achieve total integration of the products and services within the credit union.” [email protected]</p>