Credit Union boardrooms often share a common question in regard to the introduction of a wealth management program, namely:
“Do wealth management services pose a cannibalization threat or growth risk to our deposit base?”
Although a valid concern, the evidence fortunately shows that an advisory model wealth management program actually serves as a catalyst for deposit growth.
Growth Through Deeper Relationships & Data Insights
Deepening Member Relationships: Wealth management opens doors to deeper, advisory-based relationships with members. As advisor(s) guide members through their financial plan and investment strategies, their trust in their credit union strengthens, often leading to an increase in deposit balances and use of other banking services.
Deposit Retention through Comprehensive Services: Members are less likely to transfer funds to external institutions if they receive both banking and investment services under one roof. This retention inherently safeguards and potentially increases the deposit base.
External Account Insights: As part of a member’s financial plan advisors should be aggregating all of their financial accounts, including externally held deposit, loan, and credit account information. These insights, typically not easily accessible to the credit union, allow for targeted deposit opportunities.
Advising on Liability Management: Advisors do not just focus on asset growth; they should also be experts in managing liabilities. This holistic approach allows members to make informed decisions about loans, mortgages, and debt management, often leading to increased engagement with your credit union's deposit and lending products.
When members engage with wealth management services, the focus should not be diverting funds from savings to investments. Instead, the focus should be creating a holistic financial ecosystem where members can receive savings, investments, loans, and other banking services - contributing to their overall financial health and stability.
Get In Touch
Interested in offering a wealth management program to your membership or reviewing your current program?
Please contact Michael McDermott, Head of Program Management at 708-487-1458 or email@example.com