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How to Engage Banks and Credit Unions

Bringing Investment Services to Banks and Credit Unions: the Haves and Have-Nots

25 Jul 2017
Bringing Investment Services to Banks and Credit Unions: the Haves and Have-Nots

You’ve been friendly with several bank presidents in your community for years, chatting at chamber events, attending community fundraisers, maybe playing a round or two of golf. You recognize the banks’ customers could offer a new pool of potential clients. How do you raise the subject without sounding needy – or greedy?

First, get comfortable with the idea that banks and credit unions want and need new ways to increase non-interest revenue. Their customers dislike nickel-and-dime charges, especially those that impinge on the convenience they need for their busy lifestyle – like driving further to an ATM where they won’t pay a fee for taking out their money. They are more willing, however, to pay fees for services that help them reach their financial goals – like financial planning and investment advice.

Second, provide some empirical data on the value of offering an investment program to their customers. Make the case for how investment services effect the bottom line:

  • Customers are “stickier” when they use multiple products and services from the same financial institution.

  • Customers who use investment services through their financial institution have higher savings and checking account balances than those who do not.

What if the financial institution already has a program? Offer information on how that program could be generating more revenue, which in turn lets the institution expand its lending capacity. Strategies that can make bank and credit union investment programs work harder are:

  • Including investment advisors in bank strategy

  • Introducing internal referral programs

  • Increasing marketing efforts for investment programs

  • Improving investment advisor efficiency

  • Making the most of available technology

Third, showcase the value of your knowledge and experience working with investing clients combined with your broker-dealer's understanding of financial institution investment programs. Banks and credit unions have specific needs when it comes to providing investment program services to their clients and members, including different referral processes, regulatory standards and business models.

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