CHICAGO — While credit unions are helping members become more financially savvy they may want to also turn their focus inward–to staffers.
"It is obvious that credit unions care a lot about providing financial education for everyone and they do a phenomenal job of promoting it to members and serving the underserved," said Joe Saari, CEO of Precision Information, an interactive educational materials provider. "But they are kind of like a cabinetmaker who does amazing work for clients but his own cabinets at home need to be fixed. Sometimes credit unions overlook the potential financial education needs of their own staff."
A discussion back in 2003 with Desert Schools Federal Credit Union CUSO President Becky Nilsen about the need for financial education courses in the credit union industry several years later led to a Precision Information collaborative effort with some 30 credit unions. The result was a new Web-based training tool called the Educated Investor University.
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Released in March 2007 and beta tested for over a year by credit union employees, the University is an online learning program that provides courses in topics ranging from retirement planning, investments and insurance, to financial planning.
Complex financial subjects are broken down into challenging but easy to understand personalized lesson plans. Self-assessment quizzes allow students to measure their own success. Students can log-in where they left off and track topics as they complete them. In addition, managers can track employees' progress.
Saari adds that the lack of financial education costs employers and businesses in worker productivity. Research indicates that a combined impact of better financial education and well-being can result in a gain to the employer of $750-$2,000 per employee. Similar benefits are derived from reduced employee turnover expense. Employees also achieve greater job satisfaction.
Given the potential value in educating not just frontline but all staffers, Saari was curious about the average credit union staffer's financial IQ. "My suspicion was that the average credit union employee's financial knowledge would be reflective of the average person in America, which according to surveys is about 55%," said Saari. "It is important because while credit unions may not be able to compete against the superbanks in marketing or technology their biggest advantage is their dedication and closeness to their members. That means building member loyalty by deepening existing relationships and no matter how much of a 'sales and service' culture a credit union has employees won't promote or sell a product or service they don't understand." Wanting to get an industry baseline, the firm tested the financial knowledge of over 1,000 frontline to senior executive credit union employees. Each person was given 25 unique quiz questions related to personal finance, investment basics, and retirement and wealth management.
The median score was 55.7% with no difference in performance based on years of experience, education or title.
"It was interesting. You would've thought the more seniority an employee has the better they would score or having a higher degree or title would make a difference but it didn't matter. It is not just young people or frontline staff–we tend to forget that the average adult just doesn't know as much about personal finance," said Saari.
To test the merits of education, credit unions that participated in the initial survey were offered the opportunity for their employees to take a one or two hour online course on financial education. In a three-week period, 192 people took the courses and were then tested on their knowledge.
Not only did the median score jump 26% to 81%, but over 82% of those students reported a rise in confidence saying they would be more likely to talk to members about the products related to course content.
Over at Desert Schools, a combination of staff financial education, sales incentives and an increased awareness campaign resulted in a jump from 3,000 product referrals and $20 million in sales in 2004 to 9,500 referrals and $55 million in sales in 2006.
"Make the time to promote financial literacy from within," said Saari. "At the end of the day it makes sense. In addition to helping improve sales and service it will help generate an enormous amount of goodwill. An investment in yourself is not like memorizing the latest rules and regulations it is something that is good for you and your family. I think that instilling the credit union service philosophy through financial education can add a new dimension for growth." –[email protected]
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