Alliant Looks to LPL to Expand Investment Footprint
With a retail investment portfolio of $135 million in assets under management, Alliant Credit Union said it is poised to grow even more.
The $8.2 billion credit union in Chicago recently made a leap toward that potential growth when it recently signed on with LPL Financial’s Institution Services platform.
With primary office in Boston, Charlotte, N.C., and San Diego, LPL Financial’s institution services provides third-party brokerage, wealth management and trust services to the investment programs of banks and credit unions.
LPL Financial said it is the largest independent broker-dealer in the country serving more than 685 banks and 239 credit unions. The firm provides integrated technology, clearing and compliance services, practice management programs and training, and independent research to more than 13,100 financial advisers and supports 4,500 licensed with insurance companies by providing clearing, advisory platforms and technology solutions.
Laura Wallace, vice president of branches and retirement and investment services at Alliant, said the credit union was looking for a partner with the scale and resources to help it grow its business at a national level.
“We have some good numbers but with 270,000 members, we’ve got a lot of room to grow,” Wallace said.
The credit union is expecting $2.3 million in gross dealer concessions this year. Its investment program has $135 million in assets under management working with 2,100 members, Wallace said.
Alliant is expecting the new alliance with LPL Financial will help gain valuable new efficiencies through the independent broker-dealer’s technological platform as well as to benefit from the vast amount of resources available through its dedicated support of the institutional channel. Wallace said.
Alliant is also looking to tap into the LPL Financial network of financial institutions in order to gain greater access to industry-wide best practices and business networking opportunities, Wallace added.
Originally established as the credit union for United Airlines’ employees, the bulk of its membership still comes from the carrier, Wallace said. Older members are seeking out ways fill in the gap brought on by low interest rates, she noted. Still, Alliant is also working with more members outside of the United Airline footprint, including younger members.
“We have a good mixture. We’re probably heavier in the older demographic with those who are already retired or transitioning into retirement,” Wallace said. “They’re taking their nest eggs and asking ‘how can I make it work for me the best.’”
Alliant wanted to take its retirement and investment program to the next level by growing its advisory business, expanding the credit union’s offerings and increasing revenue through deeper penetration into its member base, said Andy Kalbaugh, managing director at LPL Financial Institution Services.
“We want to help continue their growth, which is already on a great trajectory, as well as drive higher productivity so that the advisers are able to spend more time with members,” Kalbaugh said.
One of the ways Alliant will increase the interaction is through a new call center with Skype and WebEx capabilities for those members who are not in proximity to the credit union’s 14 branches located in its home state of Illinois and Arizona, California, Colorado, New Jersey, Texas and Virginia. Members are now served by nine advisers with two more set to be hired in 2013.
“Alliant is very lean. We’re not a brick and mortar credit union. That brings challenges for those who are in states like New York or Florida. Any of those members that aren’t in our branch areas to meet face to face with advisers, we can route to the call center,” Wallace said.
In seeking out a partner, Alliant wanted to align with a company that could sync with the credit union’s national scope, Wallace explained. At one point, the retirement and investment program experienced slow growth, she added. Prior to signing on with LPL Financial, Alliant worked with another vendor. LPL Financial was among the four firms looked at. Ultimately, the broker-dealer’s national scope, technology platform, additional fund availability and providing ease to advisers so that they would be comfortable selling things like mutual funds won out.