CUSOs have a natural affinity with credit unions; we are both service organizations and are philosophically and culturally aligned, unlike traditional brokerages and Internet financial services firms.
Although many credit unions are interested in developing active investment programs that add noninterest income to their bottom lines, the ones we work with also perceive investment programs as a valuable and important service to provide to members. It's about the members in addition to the financial contribution.
Let's face it, the products sold by broker-dealers including mutual funds, stocks, bonds, and other investment vehicles, are all about the same, so what matters is the value we add to that such as relationship and service support, tools and programs designed specifically for the credit union including the financial education of the member.
With no proprietary products to represent, we are on the same side of the table as the credit union. We have no conflicts of interest, and we both have a sense of loyalty to the members. Unlike publicly traded big brokerages and wire houses, we are not beholden to shareholders that focus only on the number of reps or programs. Our focus is on helping the credit union be successful.
In our case, credit unions have a 75% profits interest as limited partners in our CUSO. By giving them a stake in our success, we bond in a way that traditional and non-traditional financial service players cannot. It's also important to note that we are not in competition with any of our credit unions for their members, like the independent broker-dealers that may have offices in your market competing for your members.
Credit unions eager to increase the productivity and stickiness of their investment programs should focus on the fundamental or keystone components of awareness, credibility and integration. Along with core products such as checking and savings accounts, mortgages and car loans, the investment programs need to become an equal partner in that equation.
We think that top-down support from credit union management for the investment program is a major key to its success and to making the credit union the primary financial institution for its members. When you have senior management supporting it, it's going to be better integrated alongside the other core products and services offered. If it's better integrated, it's going to be part of the overall strategic business plan and a key component of the marketing plan for the institution.
For the average person, their retirement savings is the largest portion of their savings. They worry about whether they will have enough to last a lifetime and when to use it. They need help. Since they already have a comfort level with the credit union, there is a great opportunity to deepen that relationship. We need to establish relationships, educate them on what we do, and show them that we care for the member in the same way the other departments do. What's important is to show that we have professionals who really can help members achieve their financial goals.
Valorie Seyfert is president/CEO and co-founder of CUSO Financial Services. She can be reached at 1-800-686-4724 or [email protected].
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