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<p>OVERLAND PARK, Kansas – Corporate Network Brokerage Services has released the results of a survey, conducted by CUNA, which it says is proof that it is the biggest brokerage and outsourced ALM provider to credit unions. “Our position is, based on this survey, that we’re the largest provider of brokerage services and outsourced ALM products in the credit union market,” said CNBS President/CEO Brian Hague. CNBS is owned by 19 corporate credit unions. The survey went out to 1,350 credit union CEOs with at least $20 million in assets and $5 million in marketable securities, plus all CNBS clients. That equates to surveys mailed to 471 CNBS clients, and 885 to nonclients. It’s important to note that client survey cover letters were on CNBS letterhead, while nonclient survey cover letters were on CUNA letterhead. A total of 409 surveys were completed. Of those 409 surveys, 218 were from CNBS clients (a 46% response rate), and 191 from nonclients (a 22% response rate). One thing that’s clear from the survey is that CNBS, First Tennessee and First Empire are the three major players in the CU investment arena, with Morgan Keegan and Vining Sparks a notch below the top three in terms of marketshare. The survey found that CNBS has 35% marketshare for brokerage services; while First Tennessee has 25% and First Empire 23%. The leading corporate CUSO broker/dealer was WesCorp’s at 11% followed by Southwest Corporate FCU’s at 9%. While CNBS has 35% marketshare for CUs using its brokerage service, a lesser number, 25%, consider CNBS their primary provider. That topped all other broker/dealers. Coming next was First Tennessee with 11% considering them their primary provider, followed by 8% for First Empire. As for CUs with $500 million or more in assets, “other” was the winner there. Of those CUs with $500 million or more assets, 72% listed “other” as their broker. “Other” was listed in the results and not the individual firms, because none of the firms listed in “other” had more than 5% marketshare. Hague speculated that “other” was probably large regional banks and brokers like SunTrust in the South and Bank of America in the West. Next came CNBS at 57%, First Tennessee at 37%, and Morgan Keegan at 28%. Breaking the country into nine regions, CNBS was the leading CU broker in all but three regions. Corporate CUSOs had success in the regional category. WesCorp’s broker dealer dominated in the Pacific, while Southwest Corporate FCU’s dominated in the West South Central. First Tennessee was the leader in the third region, Pacific, over CNBS. CNBS was the most consistent across regions with at least 26% marketshare in all nine regions. Interestingly, all of the credit unions that listed a corporate CUSO as their primary brokerage provider, also use CNBS’ brokerage services. Only credit unions that listed First Tennessee, Vining Sparks and “Other” as their primary brokerage providers, do not also use CNBS. Awareness of the CNBS brand is good. At least 69% of all credit unions are aware of its products and services. Its brokerage services are most recognized with 100% of clients aware of them and 98% of nonclients. Next is its advisory services with 88% of clients aware, and 78% of nonclients. While strong numbers in all categories, the CNBS products CUs were least aware of were policy reviews and monthly portfolio reporting. Hague hopes to up awareness on all CNBS clients through new marketing initiatives. “We’re rolling out advertising and direct mail campaigns both nationally and regionally to let people know we’re the market leader,” he said. Brokerage services were the most used services among CNBS clients at 98%, followed by its educational Institutes at 37% and advisory services at 31%. ALM Services were a distant last at just 20%. The survey also asked credit unions to list the four most important company attributes for choosing a firm. The choices were staff expertise, overall reputation, knowledge of CU operations and location. On a 4 point scale, staff expertise at 3.6 for clients and 3.7 for nonclients was the most important attribute, followed by overall reputation at 3.4 for CNBS clients, and 3.5 for nonclients. Knowledge of CU operations came in at 3.2 for CNBS clients, and 3.5 for nonclients, and in last was location at 1.2 for clients and 1.5 for nonclients. Whether credit unions consider CNBS or some other provider as their primary brokerage provider, credit unions are very satisfied with their primary brokers, giving them at least 3.7 on a 4 point scale. As far as CU satisfaction with their primary broker’s performance on the most important product attribute (competitive pricing), CNBS scored slightly lower (3.6) than First Tennessee, Southwest and George K. Baum at 3.8 and Morgan Keegan at 3.7. One interesting overall survey finding, that had nothing to do with who a credit union uses for brokerage or ALM, was that 71% of credit unions say they do ALM modeling in-house, versus 39% who outsource it. CNBS led in outsourced ALM, and Profit Star was the most popular ALM model used in-house (see charts). About half of credit unions surveyed (49%) said they purchase securities monthly, and 37% said they purchased in blocks of $1-5 million. Only 4% of CUs purchase in blocks of $5 million or more. [email protected]</p>

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