Love Those Deposits.In Search of the 24 Karat Relationship Through 401(k) Reviews
There is clearly quite a bit of ardent courting going on these days as mega banks and investment houses from around the globe are in hot pursuit of deposits. These colossal international conglomerates appear to have set their sights on American consumers at large and they are actively wooing many credit union members with offers that seem too good to be true. Consumers appear to be willing to go to the altar with virtual strangers in their hopes of finding the modern day "24Karat Relationship." Today, the average Joe and Jane are being pursued for their hard earned retirement funds and core deposits that had previously been all but snubbed by the current crowd of overly amorous financial institutions. Truly there is a growing infatuation as the "Megas" are frantically in search of deposits.
Where does the modern day credit union fit into this battle for the hearts of the American consumer? Possibly it is in the counseling and educational stage of the interaction between the member and the credit union. While I am not certain Dr. Phil would agree with the analogy I believe he would encourage us to protect that which we value. So the questions to consider are, "Do you value your relationship with your members? Do you believe those relationships are being threatened by the current wave of suitors?" I believe a regimen of proactive communication with members is indicated when the member relationship is at risk.
All too often we are not talking to our members and our communities about basic retirement services. Many are also not actively listening to the voice of members as they change addresses because they have a new job or they are shifting funds in thoughts of buying a second home. These are all potential indications that an investment fund review could be a very good way of strengthening the member relationship.
Consider the typical 401(k), for example. When was the last time you looked your members squarely in the eye and said, "We love your retirement funds, how is your 401(k) doing these days?" Those credit unions that have proactively engaged in conversations about life changes and 401(k) funds are finding there is an enduring value in being the trusted advisor a member can turn to with no strings attached.
This is equally true of the young members as well as the more mature crowd. Layoffs hit across all demographic strata. Most 30-somethings have already survived more job changes than their grandparents experienced in a lifetime. In this day of frantic job-hopping, the younger member in the career-building stage of life is typically spending more time on developing a strategy to move from their cubicle into an office than they are in managing their 401(k). Often, that young up and comer simply forgets to care for these funds when they leave their employers. It is not uncommon to find a couple in their early 30s that have multiple accounts that need the tender loving care of a great credit union investment advisor.
For those of us who have also served the rapidly graying and balding boomer generation, this is no time to bail out on a long-term relationship. Pre-retirement and retirement services are best provided by the credit union that has been there through the building years with the member. We all know the statistics and it can be a full-time job for a significant portion of the average credit union to meet the emerging needs of boomers. The educational needs as well as the specific product and service needs can be provided very inexpensively by even the very small credit union.
On a very practical level it just makes sense to stand by your member when it comes to investment services, wealth management and retirement management. Why not consider offering free 401(k) reviews to members of all ages. This is a great starting point to educate members about optimizing their funds. It is also a wonderful way to introduce them to an investment advisor that they may call on when the stranger comes knocking at the door trying to win their hand. At KeyPoint, we have been very pleased with the initial response of members young and old alike with literally hundreds of members taking advantage of our free 401(k) review service. It also brought millions of dollars in new investment accounts to KeyPoint Financial Services in a very short period of time. Most importantly, we believe we are strengthening the bond in the relationship with our members. Other very simple opportunities to support members include educational seminars, articles and e-notices covering topics such as: "the most common 401(k) blunders," "how to maximize investing potential when you change employers," and "the risks of borrowing against your plan." Over the past four years, we have repeatedly experienced attendance at weeknight seminars reaching members and their friends. We estimate that we have had an unduplicated audience that exceeds 3,000 members and their friends over time that have benefited from these free seminars. While the actual topics and audience vary, the exit interviews consistently reflect the appreciation of the attendees. It is really a rather low cost way to tell members and the community that your organization is a place where they will receive the care that reflects a respectful relationship between a financial institution and a consumer.
Although our membership at KeyPoint is extremely young, highly educated and upwardly mobile, we realize that they are often vulnerable to the pressures of the Megas. The 401(k) reviews are now a standard part of our proactive service offering. We have come to believe the war for core deposits is really more a battle for the hearts of members. Keeping the communication channels active will surely build life-long valuable bonds worth their weight in gold.