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ORLANDO, Fla. – As banks continue their merger trend and Baby Boomers and others stand poised to inherit trillions of dollars, credit unions continue to be reminded of the benefits of offering members trust services. “It’s not just Baby Boomers but those that are inheriting wealth right now,” Dan Wroblewski, vice president of CUNA Mutual Group recently told Discovery conference attendees. He said credit unions must offer trust services, and unfortunately right now, “they’re woefully behind banks.” Seventy percent of all wealth is in the hands of people over 50 years of age, with personal net worth of that generation estimated at $12 billion to $15 billion and there is an average of 10-14% annual growth rate in U.S. households with $100,000 to $1 million. The greatest transfer of wealth in history will occur in the next 25 years, he added. Wroblewski said many members do not have the time or expertise in managing their assets and estate planning, and banks haven’t shown interest in many members’ trust needs. That’s an important distinction since 9-15% of members are considered “high net worth” with complex financial needs. Still, estate planning needs are no longer strictly the domain of the wealthy because most people need wills, an estate plan and investment advice, he emphasized. “Before you determine whether trust services is a fit for your credit union, some homework has to be done to understand your demographics,” Wroblweski said. “You must examine the age, net worth and income levels of your members.” Once those needs have been identified, the benefits for members, credit unions and CUSOs are plentiful, Wroblewski said. Benefits of trust services include enhanced fee revenue, building up assets under management and maintaining primary financial institution status, as well as increased member loyalty and retention. Wroblewski said partnering with a trust company has some disadvantages in that you don’t have control over products and services, but it also has benefits. “You greatly reduce start-up costs, legal fees and staffing expense, and regulatory and insurance issues are borne by the trust company, not your CUSO or credit union,” he said. “You eliminate the need for the capital infusion necessary to launch the new business.” The advantages of building a trust company through a CUSO include control over products, services, pricing and distribution. “You are also able to market to non-members, create a for-profit entrepreneurial sales culture and raise capital or sell shares – for the venture from outside the credit union,” Wroblewski said. [email protected]

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