Preparing for Future Generations: How Are Credit Unions Getting Involved?

As the baby boomer generation is headed into retirement, there has been a rise in the demand for trust services. Learn how credit unions are taking initiative to position themselves in this growing market.


A trust is a measure that guarantees that one’s estate and assets will be allocated to one’s heirs. Unlike the recipients of a will, trustees benefit from low tax rates and do not need to undergo a probate court hearing to receive their inheritance. Trust services also promise profitability for credit unions, which a handful of credit unions have been realizing.

The retirement of the baby boomer generation is accompanied by an increased demand for trust services. During the economically prosperous 1990’s, $33 trillion dollars of personal wealth was created. It is predicted that by 2052, $40 trillion dollars of wealth will have been transferred from the baby boomer generation to their heirs. Many credit unions currently offer services that facilitate wealth accumulation, but only a handful offer wealth distribution services. Wes Thompson, president and CEO for Lincoln Financial Distributors stated, "While [wealth accumulation] will always be an important role, planners who only think about wealth accumulation will miss their piece of this $40 trillion pie today and in the future."

Credit unions are entering the trust business through a variety of strategies. Alaska USA Trust Company, a wholly owned CUSO of Alaska USA Federal Credit Union, focuses on targeting the institutional and individual trust business. Currently with $3.9 billion in assets under management, Alaska USA Trust was founded in 1997 with the mission of serving its members in an unsaturated market. As a byproduct of this strategy, the parent credit union has enjoyed increased member retention, as members no longer need to acquire trust services from other financial institutions. Meanwhile, Members Trust Company in Tampa, Florida franchises branches of its trust company to credit unions in six states as a part of its national roll-out plan. As a result of this effort, the participating credit unions have benefited from the partnership by creating a forum to sharing best practices as well as creating cost effective measures for their members.

The rising popularity of trust services in the financial services industry makes them an essential growth and retention tool for credit unions. As demonstrated by the successes of Alaska USA Trust Company and Members Trust Company, the addition of trust service promises to show positive returns and increased member benefits to credit unions.




July 19, 2004


  • The article addresses one of the most promising developments in the credit union industry. A must read for anyone serious about growing their organizations.