Focus Financial Services On Seniors

Credit unions can accommodate their older demographic with reverse mortgages, financial investment services, and elder abuse education.

 
 

Credit unions often target the young adult population and for good reason: members in their 20s have decades ahead of them to bank with the institution. Attracting young adults is beneficial, but credit unions shouldn’t forget their tried-and-true older members. People on the cusp of retirement and the senior population add capital, lending opportunities, and customer service advantages.  

Credit unions can find a wealth of financial opportunity in offering the older generations the financial services they need.

Spend Extra Time With Reverse Mortgages

Reverse mortgages allow retirees and seniors to tap home equity for greater financial stability, especially if they have invested significant amounts of their retirement savings into other ventures.

Chetco Federal Credit Union ($2.9M, Harbor, OR), which offers reverse mortgages to its older clients, who are a reflection of the community, is one credit union taking advantage of reverse mortgage opportunities. “Our community is 55% retired, so we need to have a full offering for them,” says Susan Lunsford, specialized service officer at Chetco FCU.

Chetco FCU has a 92-year-old member who used a reverse mortgage to subsidize her home care. The member’s two children, who live and work in a different area, were financially stable and felt it was best to keep her in her home.

Lundsford says reverse mortgages are a great service for members in similar situations, but education is key. Reverse mortgages can take more time and effort to close because of third-party counseling and the need for an in-depth dialogue between credit union and member about why the member wants the loan and what the mortgage means in the future. Click here for a list of questions to ask members when they’re deciding on a reverse mortgage.

Offer Wealth Transfer Advice

Many older members or members close to retirement are worried about how to transfer their assets to the next generation. Tough decisions include whether seniors should give heirs or charities their total assets out right or instead break them into smaller gifts, which in turn influence the amount of taxes that will have to be paid on those assets.

Sheldon Reynolds, vice president of trust and investments for Members Trust Company, says some members prefer to have their heirs inherit the money over a number of years, so the investment and trust CUSO works with members on how best to ration the assets through IRAs and credit shelter trusts.

In regards to building their wealth, Reynolds said Members Trust looks at member money investment and depending on the situation can recommend investing money in the stock market to receive a slightly higher rate of return. They provide basic financial advice as well, looking into members outside assets. According to Reynolds, for example if a member has a mortgage that isn’t making a lot of money or isn’t structured properly, the CUSO can refer them to a credit union that will provide better value.

Similarly, Visions Federal Credit Union ($3.0M, Endicott, NY) focuses on financial investment services and lifestyle products for its older members, such as gifting, using wills, and trusts and estate planning, says Frank Berrish, president and CEO of Visions FCU.

Caution Members On Elder Fraud

Visions FCU educates its members on elder fraud, which has been a hot topic lately, with the increased number of Ponzi schemes and grandparent scams.

Statistics on the frequency of financial elder abuse are hard to determine because many cases go unreported. Only one in 25 instances of financial exploitation are reported, according to John Wasik in “The Fleecing of America’s Elderly,” on the National Center on Elder Abuse website. That means every year could yield more than 5 million elder abuse victims.

Senior citizens that have been victims of elder fraud typically don’t recover their money and suffer from depression and increased physical problems. Visions FCU has a full-size auditorium at its credit union center, which Berrish says hosts 18 to 20 seminars a year with several pertaining to the topic of elder fraud. The credit union has reported about six cases of elder fraud to the district attorney. A security officer at Visions FCU makes trips to senior citizen homes to educate them about elder fraud.

Having your district attorney’s number on hand and educating tellers about fraud detection are ways to make sure the problem is handled quickly and efficiently.

Credit unions are serving, and in some cases fighting, for their older demographic, not only because those members boost capital and broaden lending practices, but because credit unions simply value and want to serve their seniors. And there is ample opportunity to do so.

 

 

 

April 2, 2012


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