Digital innovation: The future of wealth management in credit unions
The 2024 PROCU Conference marked a pivotal moment for the credit union industry, setting a new attendance record with more than 55 credit unions represented. The record-breaking turnout reflects the growing importance of PROCU as an essential gathering for program managers to discuss topics unique to leading wealth management and investment services programs in credit unions and talk about how digital innovation can be a key driver in the evolving role of wealth management within credit unions.
The digital imperative for credit unions
Over the two-and-a-half days at PROCU 2024, a central theme emerged: the need for credit unions to leverage digital technology to drive greater efficiency in their wealth advisory practices. This focus on the importance of digital technology in wealth management wasn’t merely about automating processes or improving customer touchpoints; the discussions focused on how credit unions can equip their financial advisors to concentrate on growing profitable relationships while also growing the broader wealth management offering in their institutions. In this context, digital technology is not just a support tool for wealth management, but a strategic lever for credit unions to enhance both the member experience and the operational performance of financial advisors.
Digital driving growth in wealth management
Day one kicked off with a powerful roundtable discussion among credit union program managers, underscoring the importance of peer-to-peer knowledge sharing, one of the underpinnings of the PROCU program.
Bill Partin, the Founder of The Leadership Bet, set the tone for the day with his session on adding value through creative project management. One of the standout points he made was that project managers are often the unsung heroes of credit unions, being uniquely positioned to influence leadership by showcasing how wealth management can be a major contributor to both deposit and loan balances. As Partin emphasized, credit unions need to ask themselves: “Is digital part of your wealth management strategy?”
This question echoed throughout the first day of the conference with speakers delivering a key point—in the wealth management landscape, a comprehensive digital strategy isn’t just a competitive advantage, it’s a necessity for success. For example, Peter Bielan, founder of The Bielan Group, highlighted how advisors today are overstretched, with large books of business that inhibit personalized service. His solution? Optimizing business processes by scaling through digital platforms, enabling advisors to focus on high-value relationships. This approach not only ensures better service for members but also increases profitability.
The agenda continued to go deeper into the critical role of digital technology in wealth management. Eric Armstrong, co-founder of Compass Consulting, presented compelling data on the advisory business, pointing out that assets under management (AUM) at credit unions should make up at least 25% of a credit union’s total balance sheet, with the national average sitting at 29.5%. Armstrong emphasized that wealth management clients are more likely to adopt additional core products, reinforcing the business case for integrating digital technology into advisory services.
The highlight of the day for me was the Tech Showcase, where industry leaders such as Nick Hamilton of Alliant Retirement & Investment Services, Karen Benedict of Northwest Financial Advisors, and Jeff Ferraris of University FCU, shared their experiences with digital transformation, with products ranging from CRMs to risk tolerance and suitability. While a key takeaway was the importance of moving beyond traditional onboarding processes and embracing paperless workflows, I was surprised that not a single member of the panel discussed deploying a digital wealth management platform.
As I said in my remarks on day two, digital platforms aren’t just for small accounts but a flexible wealth solution that provides members with the digital investing services they need to take them through their entire investment lifecycle. Credit unions must modernize their wealth management offerings and complement in-branch operations. By partnering with fintechs, credit unions can deploy digital wealth management platforms that allow for seamless onboarding, efficient service delivery, and a scalable model that supports both small and large accounts alike.
Digital-first is the key to competitiveness
Throughout the conference, it became evident that credit unions must embrace a digital-first strategy if they are to remain competitive in today’s financial services landscape. The wealth management sector is facing competition not just from other credit unions and banks but also from direct providers and fintech platforms, which now represent a significant portion of the market.
Digital is not only driving growth among members but is a key tool for attracting and retaining advisors. As Sean George from Ameriprise noted in his session on advisor recruitment, “The future of advisor recruiting lies in technology.” Credit unions need to be prepared not only to attract younger advisors but also to equip them with the digital tools necessary to succeed in a tech-driven environment.
The digital path forward
The 2024 PROCU Conference concluded with a renewed sense of urgency for program managers. The consensus was clear: the future of wealth management lies in leveraging digital technology to create efficiencies, allowing advisors to focus on building deeper relationships with members while letting digital platforms handle the rest.
The time to act is now. The wealth management landscape is rapidly evolving, and credit unions must prioritize the integration of digital wealth management platforms into their institutions to remain competitive and deliver unparalleled value to their members.
