NAFCU Services Blog

Dec 16, 2013

Holistic Wealth Management Services

Originally posted in The Federal Credit Union magazine.

By Barry Dayley, Executive Vice President, Money Concepts

Money Concepts is the NAFCU Services Preferred Partner for Turnkey Financial Planning & Wealth Management Solutions

Structural 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 institutions’ 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. This fact, coupled with the ever-increasing commoditization of traditional banking products and banking services offered by non-bank 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. 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 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 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

More educational resources and contact information are available at

Also available: How to Start a Wealth Management Program (Recorded Webinar) »

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