Online Advice Tool Is Proving Popular With Members

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New online wealth management tools are getting plenty of use at GTE Federal Credit Union, according to Rich Helber, chief financial officer at the $1.5- billion CU.

More than 3,000 members clicked through the financial planning and advice system at GTE FCU's website during its first month of use, Helber said. That's about 6% of its online banking penetration. In comparison, bill pay penetration stands at about 14% of its online banking penetration, he said.

"This self-directed financial management tool will help our members be better educated and therefore make wiser financial decisions," said Helber.

The 152,000-member CU launched AdviceAmerica's advice tool, offered through CU consortium Open Financial Solutions Inc., in April. AdviceAmerica, in Fremont, Calif., develops web-based wealth management applications for consumers and investment advisors.

Others Follow Suit

Several other large CUs followed suit, including Santa Ana, Calif.-based Orange County Teachers' Federal, Denver-based Bellco and Ogden, Utah-based America First CUs.

The system walks members through questions regarding their financial profile, including their investment, loan, and business information, Helber said. GTE FCU is not charging members to use the service.

"Members can key in their entire income statement and balance sheet," Helber explained, "and the system will then make recommendations derived from the savings goals they've set."

The advice tool is adaptable to each member, Helber continued. Members can choose to approach their portfolio planning from five angles, enabled by express, retirement, education, life insurance and comprehensive planning modules.

In May, $4.1-billion Orange County Teachers' (OCT) FCU introduced the AdviceAmerica tool. Jose Lara, vice president of Investment and Internet Services at (OCT) FCU, said that the application uses modeling techniques and financial rules that recognize a member's investment savvy.

"The system won't recommend options or aggressive portfolios to a first-time investor," Lara explained.

The Express Planner was the most popular module among the 21 members who registered during AdviceAmerica's first week at OCT Federal Credit Union, according to Colin McLean, division assistant for Internet & Investment Services.

AdviceAmerica "delivers information at a denominator of basic financial literacy," Lara said. "This is a way for members to stick their toes in the water." Therefore, the 280,000-member CU won't have to worry about member training on the product.

At GTE FCU, members can contact the CU's financial advisors to buy products based on the system's recommendations, Helber said. "We don't allow order fulfillment online. We direct the member to our advisors."

Members Have Options

But at OCT FCU, members have the option of being immediately directed to the CU's investment services site to buy products after viewing the tool's financial recommendations, Lara said.

"Ideally, we would like members to link directly from the wealth management module to our online investment offerings," he said. "But probably what will happen is that members will follow up on the recommendations with one of our consultants by phone or at a branch."

Indeed, member-advisor collaboration is one of the strengths of the AdviceAmerica application, Lara said. "One of the challenges with wealth management is in finding something that is self-service but also has the hooks that will enable members to get more help should they need it."

Helber likened the need for wealth management tools to the need for account aggregation. "You need a certain number of online users to make it cost effective, and both services are aimed at the same audience."

Neither OCT or GTE FCUs have promoted the service. "We want to wait and see what happens," Lara said.

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