Helping Members Find Their Financial Roadmap Despite Economic Turbulence

The current turbulent economic climate has left many credit union members feeling lost. Some members are riding out the economic ups and downs of the pandemic while others are grappling with it by delaying financial planning or robbing their retirement savings to make ends meet.

In this environment of uncertainty and financial stress, it can be tempting for credit union members and even those of us in financial advising to say, “Let’s wait until things calm down, and then we’ll get together when we know more.”

In fact, according to Kehrer Bielan Research & Consulting, traditional referrals to financial advisors were already down by 50% in the last two years, and now there continue to be challenges during the pandemic. That means that credit unions can’t wait – they need to find effective and new ways to engage members now.

If your credit union has these concerns, it’s not alone. However, we must fight these temptations and not let concerns stop us from doing everything we can to help our members. There’s no more important time than now – in the midst of a crisis – to have a plan. Many credit unions are already adapting to the ever-changing environment. If you are not one of those credit unions, now is the time to develop an overall plan to help members navigate through the changing and complex times we are in.

Here are a few ways credit unions can help members through the current crisis:

Get Your Virtual Skills & Safety Procedures Up to Snuff

We don’t know how long many will be working remotely or what will change next in the current crisis. Don’t wait for “normal” to meet the needs of members – instead, adapt to make sure that you can set up meetings safely now, whether that’s in person or virtually. That means making sure the technology is in place, or safety procedures for meeting at a branch are ready, to make members feel safe and comfortable attending a meeting.

Even if a branch is open for in-person visits, members will appreciate having an option to meet virtually whether because of safety concerns or simply not wanting to deal with traffic or travel time to come into the branch.

We can’t just wait it out. Instead, we’ve got to be ready to meet the needs of members – those who already have a plan and those who don’t – no matter the environment and what changes we see next.

Proactively Reach Out

It might seem counterintuitive, but now is a great time to start a financial plan. While our members’ temptation might be to hunker down and get through the crisis, we can reduce the fear and stress people are feeling and encourage better decision-making. Even in the middle of stormy seas, having a plan to reach the shore after the storm subsides can be valuable.

Don’t shy away from proactively reaching out to members. Remind them that now is the right time to start a financial plan or to review an existing plan to see how recent events have impacted them and to determine next steps.

Studies have shown when there is a plan in place, fears and anxieties are greatly reduced. A financial plan provides a roadmap for navigating the good and bad times, so it’s important to encourage members to take advantage of this valuable service.

Give the Guidance People Need Now

In nerve-wracking and turbulent times, it’s easy for members to react out of fear. Now is the time to remind members of some important planning tips such as:

• Cut back – don’t stop. If money is tight and you need cash, continue saving something even if it’s a smaller amount. It’s much easier to open the “savings” faucet more if it’s continued running rather than if it has been shut off completely. Stopping all savings should be the last resort.
• Stick to the plan. A financial plan is meant to be a roadmap even during turbulent times. Don’t let short-term volatility cause you to make decisions you might regret later. If you are concerned about whether you are still on track, meeting with your financial professional to see if adjustments need to be made is essential.
• Don’t cash out. Taking money out of your retirement accounts should be a last resort. Not only will you pay taxes and possible penalties on the distributions, you are taking money away from your future retirement self. If you’re having trouble making ends meet in the current crisis, speak with your financial professional about options available to help in the short-term while minimizing the negative impact on your long-term plan.

The thought of financial planning can feel out of reach to many members who are struggling to make it through the current crisis, but it’s important to remember that financial planning is not in quarantine. We should not forget about our long-term goals while dealing with our short-term needs. It can be difficult to do both, but not impossible.

Going through the financial planning process with a financial professional at the credit union can help members meet what can seem like conflicting goals. Don’t let your members get lost in the current climate – reach out, offer the advice and reassurance you know they need and help more members reach a brighter financial future.

Robert Comfort is the president of CUNA Mutual Group’s CUNA Brokerage Services Inc., based in Madison, Wis.