Credit unions are by definition mission-oriented, based on membership sharing a common bond with a community or affinity group, such as teachers or military service members. The notion of the common bond dates back to the earliest days of credit unions, where co-ops were created so communities could make deposits and secure loans. This structure continues to shape how credit unions operate, as they are completely owned by their members.
The credit union “people helping people” philosophy resonates with the ethos of millennials that research shows are values-driven. Millennials have a heightened interest in philanthropy and engagement with causes that empower them to change the world in a sustainable way. They are also on the verge of inheriting wealth. With $30 trillion in wealth due to change hands from Baby Boomers to Millennials in coming years, credit union advisors are uniquely well-positioned for this shift in wealth.
Additionally, many believe that the recently passed DOL fiduciary rule will cause some of the largest firms, driven by a need to maintain profitability amid rising compliance costs, to turn away from serving the investment and retirement planning needs of middle-income Americans. Credit unions already have a strong presence in this market, so advisors within these institutions could stand to gain further.
Serving a local community can be a deeply rewarding experience for advisors. The mission-oriented work makes a difference, and with happy clients (more on that later) come happy advisors.
2. Satisfied and Loyal Client Bases
Several respected business rankings have put credit unions on top for trust and service, including the American Customer Satisfaction Index, Harris Poll, Temkin Group and Chicago Booth/Kellogg School Financial Trust Index.
Nearly two-thirds of credit union households say they would prefer to invest with their credit union over any other type of firm – which is crucial to advisors, since cultivating and maintaining a loyal and engaged client base has always been the name of the game.
3. Rising Popularity
Credit unions have undergone an explosion of growth in recent years, doubling in membership globally since 2000 and reaching $1 trillion in deposits for the first time last year. In fact, the pace of growth accelerated during the first five months of 2016, with a record 2.2 million new memberships in credit unions nationwide. Approximately one in three Americans belongs to a credit union.
While much of this popularity can be attributed to better rates on share deposits and loans and high customer satisfaction, credit unions also benefit from consumers disillusioned by multinational financial institutions since the 2008-2009 global financial crisis—and advisors can reap the rewards of that disillusionment.