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CUNA Brokerage focuses on mass market and mass-affluent segments

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CUNA Brokerage Services is far from the biggest third-party marketer in the business. It’s not even close, as you can see from our slideshows in this InDepth series. It does, however, have the distinction of the highest revenue per adviser last year – $385,000 – according to the latest Kehrer-Bielan TPM industry report.

It also holds an interesting place in the industry as it’s aimed at credit unions, which are, in turn aimed at the mass market and mass-affluent. That gives it an uncommon take on client management, not to mention the fiduciary rule.

So we singled them out in this TPM series and did a Q&A interview with Mary Wong-Young, vice president of strategy, planning and marketing at CUNA Mutual Group. She shared her concerns and insights on the credit union wealth management industry. Here is an edited version of that discussion.

Bank Investment Consultant: What are the biggest opportunities for your credit unions?
Mary Wong-Young: Right now, we hear a lot in the press about the retirement crisis, and it’s real. That’s shared by credit unions where only a third of members actually feel financially secure and they’re worried about retirement. The level of financial literacy is falling. Most people feel overwhelmed by investing, especially in the middle market. Less than a third of them feel they have adequate experience as investors. We are doing a lot of work around learning what keeps people from taking advantage of financial services to secure their financial future.

BIC: How are you going about that is it just a trial-and-error process?
MWY: One of the studies that we completed last year was an interview of middle market consumers. We discovered the primary barriers are around access. Investors don’t know where to go for help or they don’t feel like they have enough assets to qualify for a financial adviser. We need to break that barrier and that largely is through communications and letting people know that the financial adviser within the credit union in there to serve all members, not exclusively high net worth. There is no minimum amount of assets to take advantage of those services.

The second barrier is around fear of losing their hard-earned savings. These are people who have struggled and worked hard to reach savings goals and now putting them into the market is a scary thing. [The fear is], ‘What if I lose everything that I’ve saved?’ So we need to help with that. Another big challenge is the complexity. Very few people feel like they really understand investing, and they feel overwhelmed. These are all areas where our financial advisers in the credit union are uniquely positioned to break down those barriers and help middle market Americans. Our advisers are experienced advisers and they are not exclusive to high net worth.

We hear that some investment firms are migrating to the high-net-worth. However, we are still within the credit union and are available to the members there…They have a wide set of tools and products that can help and then we offer that collective and ongoing advice that people really need in order to feel secure.

BIC: How would you grow your business to address to these challenges and these needs of your clients?
MWY: One is growing the number of investment programs in the credit union space. Right now, we have about 260 credit unions offering our investment services and we have about 400 advisers who work in those programs. We want to grow those numbers. We think it is a core part of protecting their members. We would certainly like to see the number of advisers to grow in order to meet those member needs.

BIC: What is the biggest concern for your bank advisers right now?
MWY: For our advisers themselves, it has to be the Department of Labor’s fiduciary rule. That’s every financial adviser’s biggest concern right now. Although our firm's’ approach has always been about doing what is right for our members, it is creating adjustments to our advisers’ sales processes and the engagement process with the consumer. There is going to be additional paperwork. [We are concerned] about how many clients we can serve because the process is going to take longer.

It hasn’t helped there has been quite a bit of back and forth. It has been a little unclear up to this point about what exactly going to be required. It’s so uncertain what it would bring and that makes it very to….understand for sure how to make adjustments

BIC: Do you think that robo advisers could help you achieve your goal of serving more clients?
MWY: Some of it we believe is best served by a face-to-face adviser. [However, some consumers are] equally happy or prefers a call center or doing a chat online to get an answer. [We need to] unravel those things and put together a business model that frees up advisers for the points in the journey where that face-to-face interaction is important then back it up with other channels of support. Once we’ve done that, we want to continuously be monitoring and tracking and making adjustments when that is appropriate...I think it is clearly something that the industry has to solve. We started out talking about that retirement crisis and it is real. [The question for us] is how can we motivate people and put them in a place where they can secure their financial futures.

BIC: Do you have any thoughts about how the industry could solve that problem?
MWY: I don’t think anyone has the answer yet, [but] I think it is a challenge that we can solve. It is the purpose statement for this organization. It is the ‘why’ behind what I do.

The amount of trust [consumers] have in their credit unions it is very high to how people feel about financial services industry as a whole. We say that they are a part of the credit union family as they sit within those branches [so that] the trust that they have in the credit unions transfers to the advisers and the advisers have to earn that place. It's not unearned. I would say the opportunity is great.

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