LONG ISLAND CITY, N.Y.-Partnering with local insurance and investment providers could be a strategy for small CUs to boost their non-interest income streams.
Steve Ryerson, president at UNFCU Financial Advisors, noted that those products can be challenging for credit unions below $250 million or 20,000 members, but he stressed that it is also an area where credit unions can also find some success by collaborating.
"I'm not suggesting that it's the easiest thing in the world, but there are groups out there," he said.
Ryerson noted that smaller, independent providers often work from the same mindset as the credit union. "They have a better sense of community," he said. "Serving a small area, probably a small SEG or many small SEGs, I think credit unions have the opportunity to meet local providers personally."
But he emphasized that it's also important to understand things from the provider's perspective.
"If you're going to have someone come to your office and commit their time one or two days per week, you need to commit internally to getting this person appointments," advised Ryerson. "They may be commission-based providers, so they need to have appointments, and if they're doing a good job, that will generate sales revenue for them, and hopefully some of that revenue gets back to the credit union."
Factors Affecting Revenue
Credit unions often have only themselves to blame, he said, as they often lack commitment when it comes to growing non-interest income streams.
Ryerson noted that many CUs outsource those kinds of product offerings, which he said is "extremely ineffective; typically it's a link on a website that's extremely hard to find."
Not only does revenue generation take a hit, he said, but the CU loses out on an opportunity to deepen member relationships.
"At UNFCU, we have an agreement with the board that investments and insurance are core products for the retail services portfolio, so in our mind, those are on par with all of the other products we offer-credit cards, mortgages, savings, whatever else we do-and we treat them accordingly," said Ryerson. "I think credit unions are sitting on a great opportunity to do a deeper dive."
See also: "Lack of Focus A 'Disservice' To Members," Feb. 6, 2012
