The Federal Credit Union July-August 2013 - (Page 70)

inside nafcu services Holistic Wealth Management Services By Barry L. Dayley s tructural changes in the banking industry initiated by consumer demand and the convergence of financial services have forever changed the credit union landscape. In the past 2½ decades, the depository intuitions’ share of total U.S. household financial assets fell 44 percent, to 12.4 percent, while the share of mutual funds increased 16 times, to 11.4 percent.1 This fact, coupled with the ever-increasing commoditization of traditional banking products and banking services offered by nonbank competitors, poses a real threat to a credit union that is not able to address wealth management needs. Today, nearly all large financial institutions in the world offer some semblance of what they refer to as wealth management as part of their Private Banking platform. In fact, wealth management services are reportedly being provided by 83 percent of large banks, 63 percent of medium-sized banks and 49 percent of small banks.2 However, many of these organizations simply offer investment products or access to online financial planning calculators and count that as wealth management services. To compete in this space, a credit union must offer real and practical solutions. So what is wealth management, and what impact can it have on the offerings of your credit union? Wealth management is a specialty of financial planning. The wealth manager’s focus is the client, and his or her efforts are devoted to helping clients achieve life goals through the proper management of their financial 1. 70 resources. The practice of wealth management is holistic and individually customized. Success is not measured by investment performance relative to other managers, but rather by the client’s success in meeting life goals. Also, credit union staff must endeavor to debunk the myth that these services are only for high-net-worth individuals. Key factors in favor of choosing a credit union to offer wealth management services remain discretion and safety, image and reputation, service quality, and performance. Many clients still have classic needs from a financial planning and investment management perspective. However, member expectations of wealth management are changing. “Member experience” has become a differentiator for success, and it requires a new generation of relationship managers who embody competence and encourage trust and confidence. Client acquisition and retention are still imperative for successful participation in this market. Knowledge of markets as well as clients — and their “financial personality” — is vital for sustainable performance. These factors, along with the integration of all the divisions within the credit union, are essential to a successful program. Most credit unions operate through a traditional banking platform providing depository or savings products, lending products and services, and in many cases investment and insurance products. Without exceptional leadership and vision, these divisions could become self-serving silos with little or no communication among them. In order to “The Impact of Bank Sales on Disintermediation of Bank Deposits,” Kehrer Disintermediation Study, 2007, Kehrer-Limra Inc. 2. build a robust wealth management program, it is essential to align all divisions for a fully integrated life planning approach. No matter the size of the credit union, division alignment will enhance relationships, increase sales volume and product count per member, and increase and diversify the revenue stream. In addition, this life planning approach can deliver a “member-centered” experience that will raise a credit union to the top in the competitive investment arena. If your credit union is not offering wealth management services, or if your investment program is not as successful as it should be, consider engaging an organization that can help you deliver these services in a way that will set you apart. By doing so you will position your credit union as your member’s wealth mentor. Barry Dayley is executive vice president of Money Concepts International Inc. and heads up its Financial Institution Program. Money Concepts, a full-service wealth management organization, has been helping independent financial advisers and financial institutions deliver professional financial planning and wealth management services since 1979. Money Concepts is a Preferred Partner of NAFCU Services Inc. Email: barry@moneyconcepts.com Securities offered through Money Concepts Capital Corp. Member FINRA / SIPC, 11440 North Jog Road, Palm Beach Gardens, FL 33418, www.moneyconcepts. com. — Not NCUA Insured | No Credit Union Guarantee | May Lose Value. “2006 Study of Bank Brokerage & Retail Investment Services,” American Brokerage Consultants/American Banker The Federal CrediT Union July–August 2013 http://www.moneyconcepts.com http://www.moneyconcepts.com

Table of Contents for the Digital Edition of The Federal Credit Union July-August 2013

Voices and Opinions
From the Chair
Inside NAFCU
Fred Becker Leaves a Lasting Impression; Dan Berger Moves to CEO
Charting a Course
The 2013 NAFCU Award Winners
2013 Exhibitor Directory
Getting to Know...
Management Insight
Inside NAFCU Services
Potomac View

The Federal Credit Union July-August 2013

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