Mutual insurance company CUNA Mutual Group has announced plans to transition its retail wealth management business, which includes 550 advisors across nearly 300 credit unions, to LPL Financial’s brokerage and advisory platform. CUNA Mutual’s advisors were previously supported by CUNA Brokerage Services, the firm’s in-house broker/dealer and RIA.
CUNA Mutual is not closing its broker/dealer and RIA, as it needs those entities to manufacture and distribute its annuities, and for its investment management arm. About two-thirds of its advisors will continue to be employees of CUNA Mutual, while the remaining third are employees of their credit unions. CUNA Mutual will also continue to be responsible for the front-office operations, which include sales management, culture, growth strategy and recruiting. LPL will handle all the back- and middle-office operations.
The transition to LPL is expected to take place in early 2022.
Rob Comfort, president of CUNA Brokerage Services, said there are about 1,000 credit unions that offer wealth management services to their members, but only about 3% of the members use it, according to a study by Kehrer Bielan Research & Consulting. Over 5,000 credit unions have no wealth management offering at all.
Comfort said his firm hopes to close that gap. Over the past four years, CUNA Mutual’s wealth management business has grown from 411 advisors across $23 billion in assets to nearly 550 advisors managing over $36 billion. Comfort believes LPL’s digital tools will help its advisors serve more credit union members.
“The industry has tried to serve members almost exclusively with in-person advisors in the credit unions, and now we really want to leverage technology to create virtual or hybrid advisor groups,” said Comfort, who joined CUNA Mutual from LPL, where he was an executive vice president, in 2017. “The COVID experience over the past year has just accelerated the demand for these digital tools, and when we took a look at LPL, we were not only impressed with the current technology platform that they bring to the table, but we were impressed with the roadmap of where they’re heading with their overall technology suite.”
Rich Steinmeier, managing director and divisional president, business development at LPL, said the firm has focused a lot of its technology investments into workflows for the advisors, making it more efficient to do account opening. The firm has also made it smoother to transfer data into its proposal generation system, its advisory system and managed solutions.
LPL has added some large clients to its institution services platform in the past year, including BMO Harris Bank, which moved about 115 advisors to LPL’s platform in October, and M&T Bank, which announced last July that it would transition 170 advisors to its platform.