CUs present investment services via third party
Advisers work to raise awareness of offeringsNovember 4th, 2021
Credit unions usually aren’t known for offering investment services to their members, however, separate partnerships between two local credit unions and a third-party broker-dealer intend to illuminate investment strategies and offerings available to members.
CUSO Financial Services LP, a San Diego-based broker-dealer that develops customized investment programs with financial institutions, has separate partnerships with Numerica Credit Union and STCU to expand investment programs and services for members of those financial organizations.
“I think STCU Investment Services is somewhat an unknown,” says Chris Severin, vice president of retail administration at STCU.
Nancy Almond, senior vice president of Numerica Financial Services, relays similar sentiments.
“I’ve had people say, I didn’t even know this was available,” says Almond, who also is Numerica’s program manager for CUSO Financial Services. “People don’t even realize the wealth of information out here you can get from your local community and not pay for it.”
Numerica Credit Union has a team of six licensed financial advisers who manage a $200 million program for Numerica Financial Services, according to Almond.
Advisers are required to have both securities licenses and insurance licenses.
“The securities licenses are required to sell all registered products,” Almond says. “We also have licenses for our advisory.”
Numerica’s investment and advisory personnel provide services as fiduciaries, meaning they’re required to put client’s best interests ahead of their own, she adds.
Registered products include mutual funds, annuities, stocks, bonds, and exchange-traded funds, she says.
Almond explains that the partnership between Numerica and CUSO began about eight years ago, and CUSO has helped expand what the credit union can offer its members in terms of investment products. “We want to engage (members) in more of a deeper conversation about their financial situation,” Almond says.
Severin says that STCU has been working with CUSO for about three years. CUSO assists STCU with licensing requirements for STCU’s five financial advisers with CUSO providing help with an adviser, a supervisor, and a marketing person. CUSO also provides regulations and oversight to the investment services team.
Severin declines to disclose the value of STCU’s assets under management. He says the value is dependent on the individual financial adviser, however, “year over year performance has been remarkable.”
“They bring a lot of synergy, regulatory oversight, and fiduciary responsibility to the scene,” Severin says of CUSO.
Representatives of both credit unions say members can access investment services online, by calling, or by visiting a branch to schedule an appointment to speak to a financial adviser at no cost. However, there are fees associated with investing, both Almond and Severin note.
Almond says, “It depends on what the client purchases, but the fees are similar in our industry across different investments.”
Severin adds, “There’s not a cost to have an advisory conversation but there obviously are costs involved with those treasuries or securities that may be at play.”
If a client chooses to purchase an investment product, then an account is opened with CUSO instead of directly with the credit union.
“We have to open an account with the brokerage firm, that’s where CUSO comes in,” Almond says. “They’re purely just our partner to help us facilitate those investments so that I can purchase a mutual fund for you, or I can purchase an annuity. That’s where we have to place that business because that’s not the credit union.”
Local credit unions that offer investment services to members need to use a third-party broker-dealer to facilitate non-deposit investment products and services, which involve investment risk and aren’t federally insured by the National Credit Union Administration, which is the credit unions’ counterpart to banking regulator Federal Deposit Insurance Corp.
Financial advisers at both Numerica and STCU are dual employees of CUSO and the credit union they represent, Almond explains. The advisers also are contracted to work exclusively with the credit union they work for.
“So that means I can’t go to the other credit union down the road and try to sell investments to their members,” Almond says.
STCU’s investment services include mutual funds, stocks, bonds, and annuities, college savings plans, estate planning, asset management, and retirement and insurance products.
Numerica’s expanded investment services consist of retirement and financial planning, including college and mortgage savings, wealth management, and insurance products, such as life insurance and long-term care insurance.
Numerica is looking to grow its team of financial advisers, according to Almond. There are currently three open positions on its investment team.
Severin, at STCU, says there aren’t any open positions currently, but STCU is always looking for qualified team members to apply.
Numerica has over 100,000 members as of December 2020 in Spokane and Kootenai counties and its headquarters are located at 14610 E. Sprague, in Spokane Valley.
STCU’s administrative office headquarters are at 1620 N. Signal Drive, in Liberty Lake. STCU has over 150,000 members in both Spokane and Kootenai counties as of December 2020.
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