CUNA Mutual Completes Wealth Management Conversion

After a two-year conversion that put its brokerage services and supporting technology in the hands of an outside partner, a CUNA Mutual Group executive said it is back on track to help build wealth management among credit unions.

On Wednesday, Baxter Credit Union (BCU) of Vernon Hills, Ill. ($5.8 billion in assets, 341,314 members) announced that its subsidiary, BCU Wealth Management, had chosen to work with CUNA Mutual, based in Madison, Wis., and LPL Financial, based in Charlotte, N.C.

BCU Wealth Advisors provides fee-based financial planning and manages about $395 million in member investments. BCU officials cited the LPL online platform’s improved member experience and its security features.

CUNA Mutual Group and LPL Financial signed an agreement in June 2021 to transition support of the financial services company’s retail advisory and brokerage business, CUNA Brokerage Services Inc. (CBSI), to LPL.

Rob Comfort, a vice president in charge of CUNA Mutual’s unit that supports financial professionals at credit unions, said it officially completed a two-year conversion to LPL on March 31.

In an interview with CU Times, Comfort said BCU has “one of the most successful, innovative and sophisticated” wealth management services in the industry. He said it was a major decision for it to choose to convert to the CBSI system linked to LPL.

“It’s a huge endorsement,” he said.

Comfort said CUNA Mutual decided before 2021 that it needed outside expertise to create a flexible and easy-to-use online system to support financial advisors and credit union members — while at the same time developing the next iteration.

“There are so many pieces of technology,” Comfort said. “They need to be integrated and speak to each other to be able to provide value to members and financial advisors.”

Comfort said a conversion is always difficult, and the choice meant CUNA Mutual would be essentially disrupting its own success.

CBSI’s assets under management had grown from about $20 billion in 2017 to high of $40 billion at the end of 2021. When it handed the business over to LPL in 2022, there were $32 billion in assets under management, with most of the decline mirroring the market’s fall.

But the disruption of the conversion also made it vulnerable to competitors poaching its clients.

In the last two years, several credit unions announced they were switching to competitors. Among the largest were Randolph-Brooks Federal Credit Union of San Antonio, Texas ($16 billion in assets, 1.1 million members) and Virginia Credit Union of Richmond ($5.1 billion in assets, 318,946 members).

However, Comfort said the vast majority of its clients remained.

“We’re through with the conversion, and we’re growing again,” he said.

CUNA Mutual said it expects the new platform will help reach beyond the 2% of credit union members who receive investment services through their credit union. The rest either go elsewhere, or simply don’t get help.

And that latter group worries Comfort.

“Credit union members by and large aren’t wealthy,” Comfort said. “It’s critical credit union members do proper planning for the future. They don’t have room for error.”

The new approach builds the capacity of CBSI and its client credit unions to serve a broader spectrum of members in ways that are cost-effective.

That might include linking members to financial advisors remotely. It might include providing members with self-service tools to help them plan.

“We’re just scratching the surface of what’s possible,” he said.