Excess liquidity, low term deposit rates and a changing corporate network have boosted the two-year-old Accolade Investment Advisory, LLC to $905 million currently under management.
The wholly-owned CUSO of the $3.2 billion Southeast Corporate FCU is growing faster than expected, said Peter Gibson, Accolade's director of investment advisory services. Growth in the last six months has been particularly brisk, he said.
"Now that we have a track record, we can talk to credit unions about what we've done, and our strategy is more than just theory," he said.
Low term deposit rates and low loan demand have pinched net interest margins and pressured credit unions of all sizes into taking on more risk, he said. Large credit unions come to Accolade already knowing what investments they want and are seeking a favorable fee structure. Smaller credit unions new to complex structured investments with embedded options require high-touch service, he said, which includes product education and managing expectations in today's market.
Kim Sydebrant, chief financial officer for the $131 million Martin Federal Credit Union, said her need to maximize investment income required her Orlando-based credit union try new products.
"Investment advisory services offer the expertise and experience that can get us into these products as well as educating and guiding our ALCO, management team?and board through the process," she said.
Robert Fertitta, chief financial officer for the $228 million Navigator Credit Union, said he chose to work with an investment advisory service to gain in-depth knowledge of the bond market.
"Advisory services cut down on the research that the credit union has to do on an investment because their service includes this expertise," Fertitta said. "For Navigator, this has gained heightened importance as a priority, particularly given the continuing economic challenges in the markets."
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