A Smart Member Is A Productive Member

From the May 2004 National Association of Credit Union Service Organizations’ Annual Conference in Las Vegas.

By Bill Merrick

Effective member financial education not only improves members’ well-being, it builds member loyalty, grows investment assets under management, increases awareness of credit union and credit union service organization (CUSO) products, boosts use of online services, and improves member satisfaction.

So says Joe Saari, president/CEO of Precision Information, a Madison, Wis., provider of financial education materials. Few would argue against the need for financial education. Consider:

The proliferation of new investment products and services. Currently, more than 200,000 financial service firms market thousands of products to more than 160 million people.

The growing number of people who actively invest in stocks, bonds, mutual funds, and other vehicles: more than 60 million in 2002.

More than 40 million people purchased personal finance software, magazines, books, and so on during 2002.

Despite the abundance of financial products and information, 65% of investors say they don’t know enough to make sound investment decisions, 65% want more information about basic financial topics, and 82% want the financial services industry to do more to educate them, according to the Securities Industry Association, Washington, D.C.

SAFE Credit Union, N. Highlands, Calif., launched a free "wealth management assistant" April 1 that allows members to do financial planning at home via the Internet, says Marbeth Soler, investment product support manager for SAFE Financial Services, a CUSO the $1.1 billion asset credit union owns. "The goal is to help members’ well-being with a different type of tool," she says.

The wealth management assistant doesn’t sell investment products. It’s a resource members can use for retirement planning, money management, and other purposes. It offers a variety of calculators to help members decide, for example, whether to pay off debt or invest in savings, determine how long it will take to save for something, and figure out how much retirement income they’ll need.

Plus, CUSO and credit union employees like the assistant for their own use, Soler adds, which is good for business. "The more employees understand, the better job they’ll do selling it. This will drive qualified referrals to the CUSO."

Improve Members’ Financial Savvy The Encyclopedia of Personal Finance™ contains thousands of educational articles, tutorials, and interactive quizzes. All content is classified by topic, tone, and intended audience (i.e., beginner, intermediate). Credit unions can use the encyclopedia to: Reward members or encourage them to open new accounts; Help CUSO staff interest members in a wider range of investment options, and give members confidence to invest in securities, insurance, and other products; and Show appreciation to members. Due to a special arrangement with Precision Information, Credit Union National Association members can buy this $69.95 tool in bulk for as little as $11.95. To order, call Precision Information at 608-270-1609. For more information, visit buy.cuna.org or call 888-345-1285.