Financial Planning For The Masses

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Some members have millions to invest, whereas one has about $2,100-but one credit union has discovered a web-based financial planning tool that makes it affordable to offer financial planning to the masses.

Alexandria, Va.-based Pentagon FCU wanted to be able to help a wide range of members with free investment advice in a cost-effective way, according to Ann Box, investment executive at the credit union's San Antonio and Ft. Hood, Texas branches. "The beauty of the tool is that I can provide a high level of service to all members," Box told The Credit Union Journal.

For three years, the investment services group at the $8.8-billion Pentagon Federal Credit Union has used the Profiles+Forecaster tool provided by Carlsbad, Calif.-based Financial Profiles, Inc. via a partnership with San Diego-based CUSO Financial Services, LP (CFS).

Financial Profiles offers financial advice software, consulting and training services to the financial services industry. CFS is a broker dealer and advisor providing investment programs to CUs.

Seeing Most Success With Older Members

University FCU (UFCU), which has used the advice tool since April, has had the most success with older members who are getting ready to retire, according to Michael Guthrie, associate investment advisor at the $700-million CU in Austin, Texas.

"Those members tend to be more analytical and want to see, in black and white, what they need to do," he explained. Guthrie has acquired about $850,000 in assets since UFCU started using Forecaster.

Box said it takes her about half an hour to use Forecaster's automated questionnaire to draw up a financial plan for a Pentagon FCU member, depending on the member's goals and assets.

Members feed data to Box, who then can generate up to 45 different reports with graphics and a built-in call to action that addresses goals such as College Funding, Survivor Needs, or Asset Allocation.

"Now any member can have a financial plan, and I don't think many of them ever had one before because it's very hard to do," Box continued. "I prepared plans manually at my previous broker-dealer, but it was only cost-effective for the most valuable clients."

Enhancements In The Works

CFS recently announced two enhancements to Forecaster-integrating the tool with a client management database and introducing a web-based interface-making financial planning easier for investment representatives, said Steve Hollenbeck, senior vice president of marketing at CFS.

Forecaster was integrated with the CFS data VISION client management system. Now, financial plans are automatically populated with demographic and asset data, making manual data entry a thing of the past, said Hollenbeck.

Thus, Box spends less time filling out paperwork to devise a plan, she said.

Pentagon FCU is doing more than handing out free advice, Box said. The tool is paying off in the form of increased assets under management, she said.

Dollars invested at the CU are 45% higher than the average of the previous five quarters, before Box employed the enhanced version of Forecaster, she explained.

"I do a lot of plans for prospects, and I don't know if they'll invest with me or not," she explained. "The plan is part of the value-added service we give to a member.

"Yet every prospect has done business with me after I gave them the plan," she said.

Developing Credibility

Forecaster has helped position Pentagon FCU as a "credible" investment as well as deposit services firm, said Box.

"There was no place for people to go-except out the door-if they wanted to make investments," she said. "They'd go to the local Merrill Lynch. Now, the money stays in the credit union, and when that CD matures, members don't look at another brokerage house. They look at us.

"That's big," she added.

Beyond the integration with data VISION, Forecaster is now easier to access and update because it's accessed via the Internet, Hollenbeck said.

"I can access my client plans after hours at home in a secure setting," Box explained. "The other night a client sent me some funds for investment, so I checked his instructions by pulling up his financial plan online."

The web-based solution is also automatically updated, for example, with new tax tables, rate of return assumptions and inflation rates, Hollenbeck said.

About 100 credit unions-one as small as $125 million in assets-use Forecaster through CFS, Hollenbeck reported.


For info on this story:

* Pentagon FCU at

* CUSO Financial Services at

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