Encourage Equal Opportunity Investment

Tailor stock and retirement offerings to appeal to a diverse membership.


Glance at the traders on the floor of the New York stock exchange. Scan the pictures from the investment section of your favorite publication. Or tune in to financial shows like CNBC’s Mad Money. Notice a pattern?

As my colleague, Bailey Reutzel, pointed out in her blog earlier this week, if you’re not a WMAM (that is, a wealthy middle aged man), you may get the feeling that the investment industry just isn’t tailored to people like you.

Recent market scandals have further dampened enthusiasm and trust among average consumers, but getting access to good investing options and sound retirement strategies remains critical for successful life, no matter who you are. Credit unions should craft their own investment products and services to target those overlooked by larger, for-profit providers.

Reaching members for investments requires a separate strategy than other financial products, as the underserved in this area may not be the people you’d expect.

For example, 25% of Gen Y are already contributing to their retirement through a vehicles like an IRA or 401K. Compare that to 23% for Gen X and 16% for baby boomers, and it becomes clear it is the older folks who are slipping through the investment cracks, not younger ones.

Divisions in investment activity also break down along gender lines. Research by psychiatrist Richard L. Peterson demonstrated that women are more successful investors than men, due to  better control over emotional response, less risk taking, the ability to admit mistakes, and the fact that they take advice from the right sources, says ABC News.

But despite these investing advantages and the fact they live an average of five to 10 years longer than their male counterparts (creating a longer time in later life to plan for), women typically sock away $41,000 less for retirement ($61,000 less for those with children) than men do.

These differing levels of investment are influenced by many factors outside the individual’s control (including wage disparities, variances in cost of living between young singles and older families, reduced earning potential due to raising children and more). That means it is up to financial institutions to create products and messages that can counteract these challenges and speak to individual demographic concerns.

By helping members develop a tailored retirement plan, increasing the levels of contributions to those plans, and encouraging them to take better advantage of employer matches, cooperatives can close the investment gap between various groups and encourage all members to make better financial decisions.


July 12, 2012



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