Are You Selling Products—Or Helping Members Achieve Their Goals?

Investment programs help members achieve their goals and dreams.

May 14, 2013

My wife recently decided we needed to remodel our master bathroom. Being a financial advisor, I had no idea how to pull this off nor did I have any experience to draw on.

Armed with nothing more than a few Google searches and some YouTube videos, I headed off to the nearest big box store for some plumbing parts. The gentleman helping me asked what parts I needed, and I soon realized I was way over my head.

I didn’t understand anything I was being asked. Not wanting to look foolish, I pretended to know what I was talking about and soon headed home with a cart full of stuff which, to no surprise, was completely incompatible and not suited for my project.

Next, I headed to a local plumbing store and explained what I was trying to accomplish. The associate there was very experienced and spent more time trying to understand what I was doing.

He looked at the pictures I had taken, and even had me call my wife to get the final authority on the project. He then proceeded to help me pick out the proper supplies, and showed me how to install them.

In the end, the ultimate difference was that the first establishment wanted to sell me some parts, whereas the second sought to help me remodel a bathroom.

There is a significant difference between selling someone a product and helping them achieve their goals. It is the same in the credit union movement.

When a member comes into a branch, do we look to only sell them a financial product such as a home equity line of credit or share certificate—or do we truly seek to help them with their financial goals?

Many times a member enters the credit union with a vague list of needs and worries. They often feel anxious and frustrated when trying to make the correct choices, but many fail to express their concerns for fear of looking foolish or incompetent on such important matters.

This is where having an investment program with a licensed financial advisor is so valuable to the organization. It is the advisor’s responsibility to aid the member in transforming these emotions into realistic, achievable goals, and to develop a plan to reach them.

Having an investment program allows members to take a comprehensive approach to managing their finances so they can achieve their goals and dreams. A fundamentally strong plan permits members to spend more time working toward their goals rather than worrying about their financial future.

Investment programs not only benefit members, they bring increased value to the credit union as well. While creating a financial strategy that's appropriate for the member, a financial advisor will often uncover cross-sale opportunities, such as home, auto, and personal loan refinances.

In addition to generating cross-sales, a developed investment program is a viable option to supplement existing sources of noninterest income.

For most credit unions, interchange is the single largest source of noninterest income, followed by overdraft protection fees. Recently, however, we have witnessed a downward trend as regulations have put a squeeze on these revenue sources.

As margins shrink, it becomes important for credit unions to explore new channels for noninterest income.

During turbulent and uncertain times, members and credit union managers alike are looking for answers. A robust investment program can be an important partner in helping us all achieve our goals.

PHILLIP HANSEN works at $532 million asset Horizon Credit Union in Spokane Valley, Wash., as a financial advisor for CUNA Brokerage Services Inc. Contact him at 509-755-3060.