Navigating Members Through 'Knowledge Products'

As year-end approaches and budget and tax decisions are made by members, the need for guidance becomes particularly important as financial product offerings become more complex.


Helping members navigate through the range of financial products is becoming increasingly important as the choices become more complex. The choices members make can impact both their short- and long-term financial profile, yet many are unsure of the implications of their choices or even the options available to them. As year-end approaches and budget and tax decisions are made by members, the need for guidance becomes particularly important.

Credit unions have an opportunity to enhance their role as trusted advisors to their members during this period. The product menu of credit unions continues to expand, and many of these offerings are dependent on engaging members in dialogue to explain their role in a member's financial plan. These 'knowledge products' are gaining traction in the market and credit unions can have a measurable impact by introducing not just the products themselves but also a structure for helping members evaluate how they might benefit from their usage.

Here are some of the ‘knowledge products' that credit unions are working with today:

  • IRAs - Credit unions hold over $57.3 billion in IRA deposits on their balance sheet. IRA options have evolved to include Roth IRAs for individuals and SEP and SIMPLE IRAs for businesses. The $4.2 trillion market presents significant opportunities for growth.
  • 529 Plans - September call report data shows over $22.1 million in 529 deposits is held on balance sheets. The average account size nationally in this $90 billion market is $12,500 according to the Investment Company Institute.
  • Health Savings Accounts - Over $38.5 million is reported in HSA balances by credit unions. Enrollment in HSAs is projected to reach 14 million individuals by 2010.
  • Reverse mortgages - While no data is available on credit union volume with these products, a handful of credit unions and CUSOs have begun offering them. The Federal Housing Authority reported 86,000 reverse mortgage transactions in 2006, a 77 percent jump from 2005 volume.

While these may be considered complex products, even more standard product offerings such as home equity loans can play an important role in members' financial plans. By asking the right questions, credit unions can demonstrate their interest in assisting members with their decisions and elevate their role to a true financial partner for their members.

To learn more about how credit unions are expanding member relationships by proactively assisting them with their financial decisions, join us on Thursday December 13 th for the webinar Growth Through Trusted Advice: Guiding Members' 2008 Financial Planning.