Building consumer perception as a trusted authority on wealth management remains a focus for many credit unions and financial institutions as the larger banks continue to dominate the mindshare of Canadian investors.
A simple indicator to highlight the challenge is the investor-to-member ratio: a measure for financial institutions of the number of members with personal banking accounts that also have an investment account through the same financial institution.
The top 20 credit unions only average 7.68 per cent between them. The standard rule of thumb for banks: 45 per cent (source: Credential).
"That speaks to a tangible opportunity for credit unions to reshape member perceptions through a stronger, consolidated retail offering", says David Fearncombe, Vice-President of Wealth Management at North Shore Credit Union.
For a number of years, North Shore Credit Union has been remodeling its retail strategy to integrate wealth management at both a branch level and online.
"We knew early on it was critical to enhance our online services. Our research indicated 60 per cent of our members with online investment accounts weren't telling us they had a separate trading account. Firstly, this speaks to the readiness of members to engage in managing their investments online, but secondly speaks to the lag in perception that credit unions can facilitate and advise on wealth management", says Fearncombe.
In the eyes of the consumer, trust is built from continual reinforcement that their credit union is a competent financial advisor, and not simply a referrer to external expertise. Some credit unions have focused on aligning the service under the credit union brand in-branch, rather than isolating it within through branch under a different brand or in a separate space. The same integrated approach can be applied incorporating wealth management into the online retail experience.
Since 2007, Central 1 has offered AccountPlus™ through MemberDirect® Online Services and MemberDirect Integrated Services. AccountPlus is a feature that enables financial institutions to provide their customers with a view of their financial picture that extends beyond traditional banking products.
Through AccountPlus, investment products held with investment partners Qtrade Financial Group and Credential Financial Inc. can be consolidated and displayed through the financial institution's website, including balances and recent account activity.
"From the member's perspective, it's very convenient to see their full financial picture in once place when they log in to their account. Banks have been doing this well for a number of years, so it's worth other financial institutions considering how they will level the playing field", says Fearncombe.
AccountPlus allows financial institutions to consolidate all personal and investment accounts into a secure online portal. "It better positions North Shore as a credible investment advisor and helps to drive traffic to our website, instead of our members automatically accessing partner sites directly", says Fearncombe.
"The adoption of AccountPlus hasn't always been smooth sailing", says Kelly West, Product Management Director at Central 1. "When access through AccountPlus to Credential was first supported back in 2007, there were some challenges . Since 2007 however, the technology and the feature has evolved reducing the cost and time to implement. Given the increasing demand, particularly in the baby boomer market, it's timely for financial institutions to re-evaluate the value of online wealth management integration."
If AccountPlus represents the first phase of online wealth management integration, Central 1's latest advancement for online wealth management, Single Sign On, brings that integration one step closer. Set to be released in the fourth quarter of 2011, Single Sign On allows users to access Credential Direct's external portfolio and trading website, without having to enter additional log in credentials or logout of the credit union's website. North Shore Credit Union will be the first credit union to market with Single Sign On.
"Single Sign On creates a better user experience", says Fearncombe, "and ensures people access through the credit union-branded website instead of exiting the account and opening another website and logging in again."
For more information on AccountPlus, please contact Client Support.
Email: client_support@central1.com
Phone: (604) 742-5252
Toll free: (877) 762-5252
Central 1 Technology and Payment Services