The constant challenge for a credit union is to become and stay a member's primary financial institution. Marketers use "PFI!" as an impassioned rally cry, yet, what creates a member's PFI choice is different per individual.
It is difficult to be a PFI for every member based on their specific needs; and in an economy where lending is critical, smaller credit unions often must focus resources on increasing loans. In doing so, some members can be continually offered loans when they are not interested in borrowing.
There exists perplexity in how to make deposit-centric members more viably active in the credit union. Instead of trying to create activity where there will likely not be any, there may be an alternate solution: investment and financial advisement services can be the exact right fit for a credit union's overall PFI strategy – and in any economy.
Here's why: Members who are deposit-focused likely have money deposited somewhere else. While the credit union may not prefer more deposits on the books without corresponding lending percentages, we still want every member to consider the credit union as a full-source financial partner.
Offering an investment service through licensed professionals creates less opportunity for members to go elsewhere. Services that include investments, as well as insurance, retirement, education and tax planning, to name a few, provide a place for deposit account-centric members to participate within the framework of the credit union but not in way that increases the overall deposit account balance.
Everybody wins. Offering an investment and financial advisement service is also a key factor to how all members view the credit union. An investment service can help boost the overall membership's perception that the credit union offers the same products and services as banks. If the credit union can deliver top quality services that also retain the credit union philosophy of "people helping people," the credit union becomes a whole package alternative to banks – a comparable, yet better, choice.
Choosing a partner or provider that extends the same credit union philosophy and brand is critical. The third party partner must match the credit union's member-focused environment. A fully-licensed outside financial company should ensure the credit union is offering quality investment services and in compliance for less overall credit union cost.
A good partnership usually combines resources to communicate the service to members and agrees it is in the best interest of all involved to keep the services within the framework of the credit union versus emphasizing a separate company. The right investment services partnership enhances what is right for every member without unnecessarily selling products and without taking away from the credit union's current services and products.
Members trust their credit union to offer quality services. It's often not a big leap of faith for deposit-centric members to try and approve of an investment service offered by their credit union. Because a member's trust has already been established, the credit union is better able to compete in the investment services market as a whole. Most companies, even bigger well-known companies, have to first catch the customer's eye, then develop a relationship with them, win their trust, and only after that, are they able to deliver investment advice.
On the other hand, credit unions are able to leverage an already existing relationship and springboard that trust to additional services. Member loyalty becomes a valuable commodity for credit unions to stand out in the investment industry.
With investment services, bigger isn't always better. One challenge that credit unions face when competing in the investment industry is making sure members know about the investment services offered. Marketing can come full circle back to the initial problem of limited resources. With the right investment company partner, however, the resources needed to market and make the program successful can be shared.
Whether it regards time or money, sharing the resources enables the credit union to extend the message effectively. The third party partner often has marketing items already developed, including financial seminars. When the outside company functions in tandem with the credit union, the results are usually beneficial for all involved, most importantly for satisfied members.
When it comes to PFI, some members consider investments, not loans, an important aspect of their financial needs. Financial planning services can provide these members a way to interact with the credit union and deepen their relationship. More interaction produces opportunities for members to select the credit union for other solutions when they become needed such as student loans. referred youth accounts, and refinanced mortgages — all outcomes the credit union seeks and PFI defines.
Sara Karam Holtz is the marketing manager at San Jose Credit Union.
Contact 408-995-3168 or [email protected]
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
