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MUNCIE, Ind. – The stats have been bandied about from a number of sources but whether credit unions are taking heed remains questionable, at least according to some industry watchers. Depending on who is providing the data, it’s been estimated that somewhere between $41 trillion and as high as $141 trillion will transfer generations over the next 50 years. The numbers are mind-boggling, but realistically, for credit unions, the “sweet spot” is between $1 million to $10 million dollars, said Fred Miller, West coast regional sales manager for AccuTech Systems Corp., a trust and investment management solution provider. Miller previously served as senior vice president and chief operating officer for Alaska USA Trust Co., a wholly-owned subsidiary of $2.7 billion Alaska USA Federal Credit Union. He left the credit union at the end of 2004. “Right now, it’s anyone’s guess as to how much will be transferred but what’s even more important is to whom,” Miller said. “I don’t think credit unions are ready because the vast majority don’t think they have members that have that kind of money.” There’s no question the still green area of trust services and estate planning, continues to move at a snail’s pace for the credit union industry. Still, they are in a unique position to get a slice of that trillion dollar pie if they do their research. “When you really dig down deep, you will find a truly remarkable thing-members do have that kind of money,” Miller said. “People have retirement accounts, businesses and a whole lot of assets that aren’t on the credit union’s books but they’ve come to use the credit union [to manage those areas].” More wealth has been amassed today by investors than in any other generation, according to Ray Unger, founder and president of AccuTech. As baby boomers come to retirement age they will be looking to transfer the large amounts of wealth accumulated during the past 25 years. This could potentially put credit unions and banks “in a great position” because there will be a big need for asset transfers and trust and estate management programs especially with investors trying to ensure intended fund distributions during and after life. “These financial institutions are the logical choice, having already established trusted relationships with these individuals through accounts,” Unger said. “Many, however, haven’t scaled their trust and estate management programs to meet this rising demand, and if they have, don’t have effective, automated tools for managing and measuring such a program’s effectiveness, risking losing a larger portion of the pie to brokerages.” Unger said some of the barriers credit unions and banks face are a lack of commitment from senior management and confusion on how to really market trust services. Traditional networks with estate attorneys and certified public accountants are a good start but other nonconventional ways such as visiting retirement homes might be another marketing option, he offered. “The lines are becoming blurred on who the competitors are so there has to be a proactive marketing approach,” Unger suggested. Miller has seen trust services departments at other credit unions having to fend on their own with little to no help from the marketing department. What ends up happening is “marketing doesn’t understand trusts and will just say `do your thing.’ ” As for the expenses associated with a trust services department, Miller said they’re recouped in a number of ways. If deposits in wealth management or on the trust side are growing, there is great potential to capture other accounts brought over from other financial institutions. “ This is a relationship, not a commodity,” Miller said referring to building trust service relationships. “It does take about five years to turn a profit but when you’re growing assets under management, it feeds on itself.” Both Miller and Unger encourage credit unions that have made the commitment to trusts to hang in there and keep their eyes on the bigger picture. Members have different needs and desires about where they want their money to go when they die. “No two individuals’ needs are the same,” Miller said. “Even though we might have the same amount of money, I may want to transfer all of mine to my alma mater or a charitable cause.” Whatever the need, Miller acknowledge that for some financial institutions “it’s [easier] to sell instant gratification” versus building long-term relationships, but most members are probably yearning for advice. “They may have inherited a million dollars but just don’t know what to do with it,” Miller said. [email protected]

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