There was a time when Credit Union of Texas members who wanted to shift some of their retirement assets around had to suffer through the painfully laggard and low-tech service offered by the credit union's broker-dealer.
Reps had to "chisel time in stone," according to Bryan Durrett, vice president of the $1 billion, Dallas-based cooperative. It would take weeks for approvals, concurred Karen Coffey, vice president of marketing. The CU of Texas's investment program had been in place for about 15 years with $30 million in assets under management. With renewed energy to jump-start the division, the credit union decided it was time to move to a faster, more high-tech solution, especially given the impact the economy has had on retirement funds.
"[In the industry], we've seen a lot of members move their retirement money not because they wanted to but because of attrition," Durrett said. "These are people who've left their employers," he noted, adding that CU of Texas has not seen any significant movement of funds among its members.
The CU started a due diligence provider search in mid-2009. One of its representatives had worked with CUSO Financial Services LP in the past and recommended the CU-owned broker-dealer and investment advisory firm. CU of Texas recently signed on with CFS for managed broker-dealer services and back office support. CFS will employ the financial advisers and manage all back office efficiencies, including operations administration, trading services and dataVISION, its proprietary Web-based support platform for advisers, and will train the credit union's staff to take over the program eventually.
Durrett said the decision to go with CFS grew out of a desire to partner with an entity that was used to working with credit unions.
"Our previous broker-dealers had an independent philosophy and didn't really know how to integrate the program into the core offerings of the credit union," Durrett said. "Although this program has potential to add income to the credit union, ultimately it is a member service and needs to help our members with their overall financial planning needs."
The newly structured investment program falls under the direction of Patti Branco, the Texas-based regional program manager for CFS who also works with five other local CUs. Members now have access to two representatives and Branco said there are plans to add up to four more as demand dictates. So far, the experience at CU of Texas has been an amicable one in large part because of the enthusiasm from the reps.
Coffey said CFS's library of marketing materials makes a huge difference because the CU can adapt them to the investment program's needs. Before, marketing plans were done in-house and lacked the muscle to attract more members. In addition to hosting seminars on topics such as retirement options and estate planning, CU of Texas will hold more general sessions on college funding and portfolio diversification. Branco said the CU will also plan invite-only monthly roundtables to check the pulse of other pressing investment areas.
As for what the reps are hearing from CU of Texas members, Branco said the No. 1 concern would probably be not having enough for retirement followed by asset distribution. Since the CU signed on with CFS in January, activity has increased.
"We had a very significant February with lots of transactions," she said, but declined to provide numbers.
Given CU of Texas' roots in the education field, revamping its investment program has helped the credit union address the needs of working and retired educators, Durrett said. The CU serves independent school districts and has sponsored pre-retirement seminars for teachers who are within five years of leaving the workforce.