The $170 million credit union has signed on with Plan 4 Tomorrow, a Web-based service offered through the Credit Union Financial Network, a Phoenix-based CUSO that helps credit union with their investment division set-ups.
Members can log on to www.plan4tomorrow.com to build a custom financial pan that covers such traditional areas as net worth, cash flow, retirement, college education, investments, insurance and estate planning. Sections on money habits, debt analysis, charitable planning and the use of advisers are also there. Each area of the financial plan contains an action step checklist so that users can prioritize and track the things they need to do in order to accomplish their goals.
"We're trying to cast a wider net," said Harry Mateer, president/CEO of the Tempe, Ariz.-based Altier CU, who is also a CUFN Board member. "Something like this would be useful for someone in their early 30s. That's when you have families coming along and you start college targeting. If you use it every few years or so starting in your early 30s, you're likely to have better results."
Plan 4 Tomorrow's timing could not be better since Altier's main select employee group is water and electric service provider Salt River Project, which has a revolving door of retiring members, Mateer said.
As a test run, Altier CU started offering the online financial planning service to its management and staff in March and in April rolled it out to members, Mateer said. While it's still early and the credit union is working to get the right pricing point for members, Mateer said initial feedback has been positive. The full report runs about 65 pages and requires a set amount of time to enter data to yield the most desired goals, be it for college and even the costs for a wedding. The plan also provides a Monte Carlo simulation that looks at risk tolerance at each age.
One of the most common questions members ask is "will my money outlive me," said Michael Prior, president of CUFN, which serves 13 credit unions. The Monte Carlo simulation, for instance, provides 10,000 different scenarios to help people get a better grip on their expectations and goals. Members can potentially see what their net worth will look like and whether they will have enough to live on each month during retirement.
"In the past, financial planning was only for the wealthy, and traditionally it was a burgeoning process, and clients couldn't interact with the planning technology," Prior said. "People are becoming more comfortable interacting with the Internet and they demand cost efficiency and high quality."
Prior said CUFN analyzed several programs before deciding on 72 Enterprises LLC, a financial planning software solution provider. The goal was to create a system that covered virtually all areas of planning yet was easy enough for everyone to use. To that end, Plan 4 Tomorrow was built utilizing a financial planning calculation engine that did not require a software download. The online program has a branded Web site for each credit union user, a live, online questionnaire and a financial planning report in PDF format. At any time, the subscriber can request implementation assistance, investment help and credit union products. Prior said the Web site is secure socket layer encrypted and has multiple fire-walls for privacy and security.
Financial advisers typically charge $1,000 to $2,000 to come up with a financial plan depending on the person's complexities, Prior said. Members are set to pay less than half that with the credit union earning revenue from the subscription fee. CUFN wanted to make online program cost efficient given that some large investment firms require a minimum of $100,000 in assets before visits are even scheduled, Prior pointed out. And, if members feel more comfortable talking with someone at the branch, there are triggers in place that will alert the appropriate people to schedule a meeting. Still, for some, online banking has become more convenient.
"People in the baby boomer group are not even coming in the branches. They're working 40 to 50 hours a week and just don't have the time," Prior said. "We have a couple of credit unions that have members who are in the military all over the world. They may not ever see a teller in a branch."
Plan 4 Tomorrow's second phase will include tailored marketing toward Generations X and Y, Prior said. In December 2008, CUFN's credit union clients offered the service as an employee benefit. The CUSO has already signed up a couple of SEGs to offer the program. Others have expressed interest in expanding their benefit packages to include financial planning and education.
But it was at an investment firm's conference last May that the idea came about to create a Web-based solution for credit unions. The firm had rolled out an online financial planning tool and soon had 40,000 plans in place, Prior recalled.
"We thought, 'there must be some demand,'" he said. "You have those times when a credit union will hope people will come in and maybe get a referral to a financial adviser. He sizes them up and sells them something. In times like these, were hoping we can help more members."