PHOENIX -
Desert Schools FCU and its CUSO, Desert Schools Financial Services, offer insurance, investments and estate planning to some 10,500 members through a team of 30 financial specialists who have posted $55 million in sales, generating $3 million in non-interest income in 2006.
That's a valuable bottom-line lesson, and one that isn't limited to large credit unions, according to Joe Saari, president of Precision Information LLC, which recently launched the Educated Investor University, a computer-based training program providing certification in retirement planning, investments, insurance, real estate and education planning and related topics.
Becky Nilsen, CEO of Desert Schools Financial Services, credits the additional income to empowered employees who help members connect with the services they need. Building a sales and service culture is more than a bullet-point goal on Nilsen's PowerPoint to Desert Schools' CEO Susan Frank and the CU's board of directors. It is the way the credit union does business, and it all starts with education. A Nilsen put it, "Employees do not sell what they do not understand."
In 2004, DSFS began to offer a Personal Finance Certificate to employees. The program offered 18 online courses related to investing basics and retirement. Some 600 people have completed one or more courses, and 110 have completed the program. All graduates go through a "cap and gown" ceremony. By giving employees the confidence to provide referrals, DSFS has seen steady growth in the number and quality of referrals. In 2004, there were 3,000 referrals leading to sales of $20 million and a GDC of $800,000. By 2005 that had grown to 5,500 referrals for sales of $40 million and a GDC of $1.6 million. In 2006 the number of referrals had grown to 9,500. From 2004 to 2006 the program is being credited with improving revenue by 300%.
The premise that financially-informed employees are better equipped to guide members and better market the CU's products and services isn't limited to Desert Schools or its CUSO, of course, and it spurred Saari and Precision Information to take its Educated Investor's Encyclopedia of Personal Finance, Nightly Business Report Edition CD (winner of the 2005 Dalton Penn Award for Best Multi-Media Interactive Learning Program) and make it available online. And Nilsen was the spark, he said.
An Online Idea
"Becky expressed her ideas. She mentioned to me that financial education was not only a 'member education' concern,' but a concern for everyone. She explained that one key challenge she and others in the industry faced was that not only does the average American not understand the wide variety of financial products -with an ever-increasing and complex financial marketplace-but that personal financial knowledge is a challenge for credit union staff, too."
Nilsen had "planted the seed of an idea for leveraging our course content to offer employees a Personal Finance Certificate as a way to increase awareness about the various investing and insurance related products they offer," he said. "In short, through a strategy of internal education, strong incentives, the setting of clear expectations for employees, and hiring key people able to convert referrals to sales, Becky and her team have done a phenomenal job of deepening the wallet share of members to the credit union. Our part in that process, Becky's encouragement and the talent and dedication of her team, inspired us to launch the Educated Investor pilot program to benefit other organizations," said Saari.
Throughout that process, and since the launch of that pilot program in 2006, Desert Schools Director of Training Matt Osborn has taken the lead in helping develop the course content, the Certificate Program, and most recently, led the charge for staff to participate in the "Educated Investor Challenge" and the "Retirement Readiness Course," now in progress, noted Saari. "Matt and Becky have provided valuable feedback on what topics to include, how to organize them, and the best practices on how to deploy them. They have also worked with other credit unions, including Mountain America, which is also pursuing online education efforts and seeing some strong initial ROI benefits."
Nilsen said the benefits of the program make the bottom line possible. "Educated employees are more comfortable and confident dealing with financial issues," she said. "Confident employees are more likely to be positive, productive employees, it makes for lower turnover and more referrals. And the availability of the Certificate Program from 2004-2006 has raised the awareness of investment services even among employees who have not yet completed their degree," Nilsen said.
And she has ambitious plans to leverage the newly released Educated Investor University platform, which now offers access to over 100 online tutorials, a more than 500% increase.
Courses are available in all areas of personal finance, investing basics, retirement and wealth management, which gives broader usage for the entire CU, she said. It also offers more robust student management, reporting functionality and pre and post-test options.CU Beta Test TeamsLaunching the Educated Investor University Online version began with the concept that it would be “created for credit unions by credit unions,” said Saari. He wanted to assemble a team of interested CU professionals that would offer criticism, guidance and ideas for improving the content, making it more apprehensible, easier to navigate and offer management controls to monitor progress.The Credit Union Journal interviewed several of the CU executives that participated in a series of once-a-month teleconference calls that started in September 2005, with occasional feedback in between.Melanie Hoffner, staff development specialist at DuTrac Community CU in Dubuque, Iowa, recalls that she was researching vendors of online learning programs for the CU about that time. She met Saari at a CUNA HR Training and Development Summit in Palm Springs in March 2005.“I think there is an information gap in that there is an assumption that CU employees understand finance. If a member asks, ‘What’s the difference between APR and APY?’ for example, or the difference between credit cards and fees, or loan terms. It’s true that a credit union employee can know the features and benefits of a product they sell without having the deeper knowledge of what it is and how it works or what alternatives exist,” she observed. For Hoffner, the issue goes even deeper, as she has sought to counter the lack of financial literacy in America.“I am still amazed at the number of states that do not have a graduation requirement for students to learn even the basics of finance or how to manage a budget, write checks, use credit wisely, etc. As a result, many adults have had little, if any, education about personal financial literacy topics and skills. It seems to me that there are two things we just don’t like to talk about in America: death and money,” Hoffner said. Sarah Yoder, SVP of Human Resources at DuTrac Community, was also an original beta test participant. “It is simply a great tool. It is easy to maneuver around and it is complete. There are no gaps in the content. It’s very thorough and accessible. You can find exactly what you need and it is always there at your fingertips. I see it as an ongoing resource for my employees,” she said. Gen-Y AttractionOnline learning isn’t meant to replace other methods, said Saari, but “People are now relying on the Intnernet as an information source and buyers market. They are essentially self-qualifying, then going directly to a source for a sale. Through the Educated Investor University, credit unions can extend their reach as a definitive source of unbiased information to employees and, by making it available to members, will generate enormous goodwill. And it will be a useful tool for attracting new members from Gen-X and Gen-Y –who are already adept at using the Net– but are skeptical of the source of information. I think that instilling the credit union service philosophy through online education can add a new dimension for growth.”Yoder agreed, saying, “I can say is that there’s always a place for ‘conventional’ methods. But for some people, particularly young people, when given a choice between learning from a book or taking an online lesson, they will opt for the online version almost every time.”She added that she became involved because she found Saari’s passion for it infectious, but also because “the excitement of being involved in developing a unique product was interesting. That’s especially true because it’s designed for credit union people and worked on by credit union people. That made it feel different, I think, and inclusive.” It was actually fun, she said. “Our conference calls got bigger and bigger. Now we even have a users group of sorts, and we talk to each other about how things are working, what we think of things and so on.”DuTrac will roll out the entire program over the summer, she said. “We bought the enterprise license so that all employees will have access to it. To me, it doesn’t matter whether you are a front line teller, a financial services consultant, or a vice president, you can always learn. And everyone should have the ability to learn more. And for those who already have financial training, there is always something changing, something new to learn.”Walking the TalkRhonda Fronczak, quality and organizational development manager for Air Academy FCU in Colorado Springs, Colo., was also on the beta test team. “Our Human Resources manager, Lisa Passalacqua, had met Joe and she asked me to look into it. In fact, it was the only program she handed over because she thought it enhanced our organization. She thought it was a good fit with our departmental goals.”Fronczak said her focus was to give employees what they needed. “The side benefit may be sales, but our initial thinking was that we owed this to employees. In speaking with my EVP, we decided that if we want CU employees to take an active part in the CU business that we should provide a way to learn what’s involved. We are an education credit union ourselves; we have a lot of school districts as member-SEGs and do a great deal of outreach to them. It only seems natural that we stand for that,” she said.Fronczak said that attitude wasn’t Pollyanna, either. “You can’t expect employees to sell something they don’t understand. You can’t sell what you don’t know. We want our employee to develop a relationship with members and if employees are well educated and well versed in financial products and are made to understand just why we choose the products we offer they are more confident and better able to build on that relationship with the member. Finally, if greater sales are a result, great. It’s also important not to try to sell the wrong product, so this works from both the business and employee perspective.”Fronczak and Debbie Cronk, one of the CU’s trainers, worked on the beta program together and were on the pilot program and participated in the monthly teleconferences. To her surprise, she enjoyed it. “Part of the reason for that was because things were so open and honest. There was no holding back. We said what we thought and our input was welcomed. That what struck me as so different about this process, it was truly participatory,” Fronczak said.Yoder agreed, adding, “Joe’s (Saari) novel approach of asking questions as we proceeded was very measured and detailed. He asked us what we thought of everything, even what you might think of as minor stuff, like the color of things or the size of a font, where logos might be placed and how big they should be, things like that. But what I realized is that all of those things play a part in how it is used, how readers see it, perceive it and learn from it. It’s a total impact kind of thing, I suppose. I’d never realized how much goes into creating something like that.”Fronczak also found that “other standard methods are still useful, of course, and I think the split we’ve come up with is good. They seem to offset and compliment one another. We use CUNA classes, and they have a recognition factor, certificates, and the Educated Investor University will do the same.”“Everyone really likes the flexibility of the Educated Investor University. They can take the classes from home, when traveling or whenever convenient, and on their own schedule,” said Nilsen.The Boomer MarketSaari believes the “Personal Finance Classroom” approach will revolutionize the way employees learn about finance and benefit their personal and professional lives. And it might catapult CUs to the top of members’ minds when they think about retirement. “The largest generation of Americans –Baby Boomers, who number 77.5 million– is approaching retirement while traditional pension plans have shifted responsibility to enrollees and Medicare and Social Security are fiscally threatened,” he said. “At the same time, consumer spending, debt levels and healthcare costs have skyrocketed while the savings rate has gone negative. In short, many Americans are not prepared for retirement.”Moreover, the lack of financial education costs employers and businesses because distress over money affects worker productivity. Research indicates that lost productivity can cost from $750 to $2,000 per employee. Similar benefits are also derived from reduced employee turnover expense because employees achieve greater job satisfaction.Fronczak said some Air Academy FCU employees have asked for more modules. “They said the material was comprehensive and they said it was worthwhile. When we first asked for volunteers, 11 responded. We told them we wanted honest feedback and they gave it. Actually, whether we bought the program or not was contingent on that feedback. That’s why we bought it. We purchased a full license so all our employees can take all the classes. We’re rolling it out in early April and hope to start with at least one rep in each our branches.”Saari was pleased by that because he feels the best place for employees to learn about personal finance is the workplace. Why? “That is where they spend the most time,” he responded. “The most efficient workplace method to teach personal finance is through an online learning method that uses a database system that allows personalized lesson plans. Leveraging this database technology and combining it with good design elements make complex financial subjects apprehensible. This system of “content mapping” breaks down complicated subjects into bite-sized pieces, and through self-assessment quizzes, lets students measure their own success; they can track topics they have completed and login where they left off. In addition, managers can track employees’ progress via the ADMIN console. I think that instilling the credit union service philosophy through online education can add a new dimension for growth.”
