Americans trust their credit unions but are less inclined to trust their credit union advisors. Thats one of the key findings of a new study from Kehrer Saltzman & Associates.
According to the study, credit union members trust their credit union more than any other provider of financial services. More than three in five (61.8%) said they view their credit unions with a great deal of trust, whereas only 27% held that view toward banks and a tiny 4.7% toward full-service stock brokerage firms. Despite this, only 18% ranked their credit union advisors as their most trusted source of financial advice.
There is a wide gap between how credit union members view their credit union and their perception of the financial advice they can get from the credit union, Tim Kehrer, senior research analyst at Kehrer Saltzman and a co-author of the study, said in a statement.
Credit union members are three times as likely to go to an independent financial consultant for financial advice than they are to an advisor based in a credit union. And theyre more than twice as likely to approach a stockbroker for advice, despite their low level of trust in full-service stock brokerage firms.
Fewer than one in 10 credit union members (6.9%) look to their credit union advisors for financial advice. Nearly one in four (22.6%) go to independent financial consultants and 13.3% go to stockbrokers, according to the findings.
How can credit union advisors capture the investment business that is going out the door to competitors? The trick may be as simple as letting credit union members know that investment advisory services are available, according to the study.
Our research indicates that only 12% of credit unions provide investment services to their members. And many of those that do have an investment services offering do not promote it to their members, who remain unaware that they can get quality investment advice right at their credit union, Kenneth Kehrer, a co-author of the study and a principal of Kehrer Saltzman, said in a statement.
The overall lack of investment services helps explain the discrepancy between members great trust in their credit union and less trust in the advisors that work there, according to the report.
Credit unions have an incredible opportunity to better serve their members, who would prefer to invest where they bank, and capture the lions share of their members financial assets, Kenneth Kehrer said.
The study, titled The Opportunity for Credit Unions in Investment and Life Insurance Services, is sponsored by CUNA Brokerage Services, a third-party marketer. It is based on data from MacroMonitor, a survey of the use of financial services by U.S. consumers.