Calif. Investment CUSO Reports Inflow Of Member Funds

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Orange County's Credit Union's new Investment Services Division is picking up steam, a spokesperson said.

According to Bill Partin, senior vice president of investment services for Orange County's CU, and CEO of OCCU CUSO Orange County Group, members put $3 million of their money into the new CUSO during January and February.

Investments-which include stocks, bonds, mutual funds, and fixed and variable annuities -are made through CUNA Brokerage Services. Insurance products, such as long-term care insurance, term-life insurance and universal life insurance, are sold through CUNA Mutual Life Insurance Company.

Partin said the program kicked off Nov. 1, 2004. Prior to that date, OCCU leased the program from CUNA Mutual.

"We retained CUNA Mutual as a broker/dealer, but we brought two more registered financial professionals in-house for a total of four," he said. "We own it now. We are on the inside of the candy shop."

OCCU's Investment Services Division offers members a free investment and insurance consultation, Partin explained. Each member who comes in is given a personal profile, and the company makes recommendations. If the members choose to make investments or buy insurance, then there are fees.

"It is going pretty good," assessed Partin. "Fee income has increased. Of the $3 million in the past two months, 80% of that was money from outside the credit union. In addition, we unearthed another $4 million in referrals back to the credit union through loans and deposits."

The "outside" money comes from members who get comfortable with their investment services advisor, he said. In some cases, members are emptying CDs at other institutions and bringing the money to OCCU.

"That has been the biggest 'ah-hah' moment of the program for the board," said Partin. "The advisors have become stakeholders. We manage the relationship well with members, and look to enhance the relationship and make the credit union the primary financial institution."

Twenty percent of the investments dollars came from deposits that previously were at the CU. Partin said the board was aware of the risk of cannibalization of funds, but was comfortable with some happening as long as the relationship is enhanced.

Partin praised CUNA Mutual for its assistance in running the program. "They have been very supportive. CUNA Mutual has great technology, and, with 700 people back in Waverly, Iowa, they have a very deep crew to take care of us."

CUNA Mutual also assists with marketing efforts. It prepares compliance-approved materials, including posters and brochures. Partin said he merely has to add in the division's logo and disclosure.

"I don't have to invent the wheel; the wheel has been invented. I take the spokes I want and make them mine. I just make it happen."

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