This article, prepared by CUNA Mutual Group for Front Line Newsletter, offers tips on retaining baby boomer members.
A milestone for baby boomers—generally classified as those born between 1946 and 1964—is just around the corner. On Jan. 1, 2011, the oldest of the generation will turn 65.
Staff interactions with boomer members can help steer them in the right direction, positioning your credit union as the financial institution of choice when they decide where and how to manage their retirement income.
Here are steps your credit union can take to help retain boomer members:
Acknowledge their needs. Boomers range in age from 46 to 64. It’s relatively easy to spot someone in the higher end of the scale. Without overtly identifying these members as being close to retirement, open conversations with them about potential retirement plans—relocation, travel, house downsizing—that lend themselves to financial discussions of 401(k) rollover plans and pension investments. If you’re comfortable with it, don’t be afraid to identify them as boomers; many like the moniker and are proud members of their generation.
Notice trends. A pattern of larger withdrawals and transfers out of credit union accounts is the most obvious sign a member might be working with another financial institution for retirement needs. Remind members of the retirement and investment services your credit union provides. If your credit union is too small to provide these services, it might be appropriate to refer members to another, larger credit union with which your credit union has a relationship. Either way, the goal is to retain the member.
Identify savings opportunities. Another sign of retirement planning needs is unusually high account balances. Inform boomer members with high balances in checking or savings accounts about your credit union’s savings plans that provide higher interest rates over longer terms. Suggest to these members that they meet with your credit union’s financial adviser about better retirement savings options. Keep the financial adviser’s business card or contact information handy for quick referrals.
Spotting boomer members is only half the battle. Knowing ways to discuss their retirement plans, and the role your credit union can play in those plans, will help retain boomers and boost business for your credit union.
JEFF HUNT is consumer product manager for the 55-plus strategic market at CUNA Mutual Group. Reach him at 608-231-7053.
Boomer Loyalty Is Tenuous
About 78 million people will reach retirement age during the next 18 years. The impact on credit unions will be significant.
As a group, boomers hold more than 70% of all U.S. consumer assets, including $30 trillion in household assets, $11 trillion in investable assets, $3 trillion in spending power, and an incredible $750 billion in discretionary income.
While not all boomers are credit union members, roughly 5.6 million are, and they hold approximately $617 billion in net worth. As credit unions continue to look for new income sources, it’s critical to attract the wealth baby boomers will carry into their retirement by developing strategies to retain boomers.
This won’t be easy. A recent survey by CUNA Mutual Group shows member loyalty is tenuous, at best, and suggests boomers think of other financial institutions ahead of credit unions for their retirement investment needs.
CUNA’s 2010-2011 Environmental Scan contains strategies for serving this important demographic.