NAFCU Services Blog

Guest post written by Levi Dayley, Institutional Marketing Specialist at Money Concepts

Shel Silverstein, the whimsical American poet, published a poem in 1964 titled “The Giving Tree.” The story follows an apple tree and a boy who plays near it. When the boy is young, the tree offers his branches to swing from and play on. As the story progresses, the boy grows into a man. As his needs change, the tree offers him its shade, fruit, wood, and eventually its stump to the now-elderly man.  (And that’s not even counting the benefits that bugs, birds, and squirrels also get from the tree!)

In the world of financial services, credit unions are the apple tree, organized to meet the needs of all their members, regardless of whether they have two legs, four legs, eight legs, or feathers and wings. But our members are aging along with the rest of the American population, and, just as in the poem’s story, their needs have changed over time. What else do you have to offer them when they outgrow mortgages and share certificates, and now need to distribute their IRAs? They have new financial needs that many credit unions currently aren’t meeting, and both your members and your credit union are suffering for it.

Let me put some numbers to the story that illustrate how your members are closer to retirement than ever, with the average age of a credit union member being 47. The first of the baby boomers (born anytime from 1946 to 1964) reached retirement age last year. Consider these statistics, taken from the U.S. Census Bureau’s findings from the recent census:

• 22.3 million Americans are aged 50–54 years old, and will be entering retirement age starting in 10 years[1]

• Of American households aged 45–54 years old, 48.2% have a net worth of $100,000 or greater[2]

• Nearly 25% of Americans aged 65–74 years old are still in the workforce[3]

• The percentage of Americans aged 90+ years old, grew from 0.52% in 2000 to 0.61% in 20101

There’s a lot you can infer from this data, but two things stand out: Americans are living longer and working well past retirement age. Your credit union should be positioned to help your members as their financial needs change. Do you really want to send them to the bank down the street for the solutions they need to meet their changing needs?

For example, as members continue to age, they are looking for advice on how to plan for retirement and aging in uncertain times. They need to know how to properly transfer their wealth and legacy to the next generation. The bulk of the assets of most credit unions are held by older member segments. What would it mean for your credit union if they moved these funds elsewhere in search of investment and retirement planning services? The challenge is how to leverage your status as their trusted financial institution as each member segment moves towards retirement.

The generic name for solutions that meet these needs is ‘wealth management.’ But don’t let the title fool you—it isn’t just for your wealthy members (and in fact it isn’t just for your older members either).  There are many benefits. First, it allows you to keep your relationship and meet needs throughout the member’s life. This relationship often extends to others in their household. Second, you can generate new sources of income for your credit union. And perhaps most importantly, you can improve member satisfaction by providing what your members need, when they need it.

Money Concepts International is the NAFCU Services Preferred Partner for financial planning and wealth management, and you can find key tips for running a successful program, as well as more information on the variety of solutions typically offered as part of a wealth management program, at www.nafcu.org/moneyconcepts.

Back to The Giving Tree story… the beauty of the metaphor is the mutually beneficial relationship: The tree is ready and willing, the man is productive and grateful, and both are happy. I hope you’ll see it this way too.

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