Hungry for a Growth Opportunity? Think About Sandwiches

The responsibility of baby boomers to manage the finances for multiple family members is a prospect for credit union growth.


Many credit unions are looking for that next great growth opportunity, or thinking about which member segment will be the key to growth. As they think strategically, more and more credit unions are turning to the baby boomers to help spur growth. Why is this segment so attractive and how can you better serve them?

In addition to juggling their own finances, baby boomers, defined as individuals between the age of 40 and 60, can be absorbed in taking care of finances for their aging parents and their children. These baby boomers are known as the “Sandwich Generation” because of their responsibility to financially support children and to care for aging parents at the same time.

The American Society of Aging reported that these caregivers today are providing two to six years of financial support to their elderly parents, totaling close to $20,000 in out-of-pocket expenses including food, transportation and medication support. Additionally, a recent University of Michigan study noted that this same group of caregivers is providing an average of $2,400 per year to their children age 25 or older.

This stressful combination of financial needs warrants an innovative approach that enables baby boomers to manage their own and their parents’ finances, without completely stripping their parents of their independence. In addition, many of these same baby boomers need to oversee their children’s finances while teaching them good spending habits.

A “Family Manager” Point of View
The financial services industry has moved from an account view of the customer base to a household view. Many credit unions are still only beginning to recognize the complete member relationship and understand their members’ household financial needs. The industry needs to evolve to this household view to provide solutions that go beyond the individual to the household and to the extended family.

Within the online channel it is possible for the member to see and manage all the accounts they own directly. By creating a “family manager” designation, it should also be possible for this same member to access and manage their parents’ finances as well as oversee their children’s finances. The online channel can enable this integrated capability for the family manager from one system, from one login – without the need to remember a number of passwords or work with a number of systems.

The family manager should be able to monitor and oversee all financial activities in the family system. It should also be possible for the manager to define what their child can view and do (e.g., can transfer money from mom and dad’s account to their own account for up to $25). It should be possible for aging parents to define what the family manager can access and do on their behalf.

Parents of Boomers
Parents of baby boomers are living longer and healthier lives. But many remain independent for years, although some don’t use the Internet and now need assistance with balancing a checkbook and paying bills, including taxes, on time. Today, many retirees are living separately from their children in different cities. Credit unions need to provide members with solutions that overcome the challenges of geographic dispersal.

Providing baby boomers with the ability to take full control of elderly parents’ financial accounts when they are incapable of handling their own finances can solve the issue of location, and can help the boomers closely supervise a tight budget or establish trust accounts.

Children of Boomers, Generation Y
Many credit unions are catering their online solutions to the needs of Generation X, today’s 25 to 30-year-olds, and Generation Y, adolescents and up to 25-year-olds. These consumers demand free, fast and easy services outside of branch locations. When looking at Generation Y, however, are these pre- and post-graduates prepared to manage their finances completely? Are they still depending on their parents for financial support? How can parents protect their own retirement assets, while at the same time teach good spending habits?

A solution that grants defined account access permissions addresses the financial needs of boomers’ children. Rather than sending a teen off to college with a credit card, a parent can assign their child an ID and password to an existing joint bank account at home. The parent can track whether a teen is buying designer jeans and iPods or groceries and school supplies. Whether managing allowances for children living at home or supporting students away at college, this enables parents to provide a level of autonomy without sacrificing ultimate control. Such a solution would also allow a parent to determine the amount of funds available to each child and have the option to issue approvals before allowing certain transactions.

Summing It Up and Looking Ahead
The increased responsibility of the Sandwich Generation to manage the finances of multiple family consumers is driving credit unions to implement online solutions that offer end-users a more personalized online experience, with the tools necessary to manage their unique needs.

Deploying personalized online solutions targeted at the extended family will attract baby boomers, a growing segment of the online population and source of increasing wealth, and enhance relationships, resulting in improved retention and new opportunities to sell additional services.

Further, offering teen-friendly applications will establish long-term relationships with young adult children, ideal candidates for a variety of financial services such as credit cards, and car and student loans. Retaining these young members over time will result in greater opportunities to offer additional services including mortgages, business loans and wealth management products.

In sum, credit unions that deliver a more personalized, time-saving, and family-friendly offering will experience a competitive advantage leading to increased member attraction and retention., “Demographics, Statistics and Issues of the Sandwich Generation.”

The New York Times , “The Bank of Mom and Dad,” April 20, 2006.




Sept. 4, 2006


  • Having the tools to manage a parent's finances is only part of the answer. Permissions to allow this must be in place. There are three basic documents that, if we all have in place, make it much easier on our children if the time ever comes when we need them to help manage our finances. Those are: 1)Durable Power of Attorney 2)Health Care Power of Attorney 3)Living Will Having these things in place, and doing a few additional preparatory things can make a big difference. Credit Unions can and should help their members prepare for the inevitable.
    Barry Shaner, Toledo Area Community Credit Union