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Giving Credit Unions Their Due

Raymond James and Cuso are winning new business by tapping into this potentially lucrative market for investment advice.

Credit unions aren't the first place brokers look for clients. But with members now holding more assets than ever, they represent a growth opportunity. Last month, Raymond James Financial Services and Cuso Financial Services, for example, expanded their relationships with credit unions as a way to expand their business.

Raymond James contracted with Heacock Planning Group to provide investment advice services to MidFlorida Credit Union. And Cuso, a leading limited partnership broker/dealer that works exclusively with credit unions, signed on the Forum Credit Union in Indianapolis and the California Credit Union in Glendale, one of the nation's 100 biggest.

More than 56 percent of credit union members had access to investment advice through 14 percent of the nation's credit unions in 2000, says Mike Schenk, vice president of economics and statistics at the Credit Union National Association in Madison, Wis. That's up from 17 percent and 5 percent, respectively, a decade earlier.

Amy Beattie, COO of Cuso, which is mostly owned by its credit unions, disagrees with the widely held perception that accounts there are too small to be lucrative for registered reps. Cuso works with 65 credit unions, including a quarter of the nation's largest ones, and expects to add another 20 this year. Cuso has won profitable business through its affiliation with Hewlett-Packard's credit union and North Island credit union in San Diego.

“Five years ago, reps were saying they weren't going to leave a bank program to go to a credit union. But it's sort of evolved,” says Beattie.

One reason is simple demographics. Many broker/dealers who worked with regional and community banks lost business when big national banks ate up the smaller, more localized institutions and installed their own advisors.

Credit unions are less likely to merge, though their numbers have dwindled as well, to 10,600 from 14,000 in 1990. Assets, meanwhile, continue to grow. The Credit Union National Association reports that there's nearly $450 billion in assets at credit unions more than double the $216 billion of 1990.

And executives say their members tend to be loyal, creating long-term opportunities for reps that work within the system. “There's an implied credibility of the credit union sanctioning that person,” says Tim O'Rourke, senior vice president of business development in Raymond James's financial institutions division. “It's lucrative for the rep. Doors are opened that weren't opened before.”


  • Mark B. Sutton, president of the U.S. private client group, was appointed president and chief operating officer of UBS PaineWebber. Sutton will continue to lead the nation's fourth-largest brokerage, but will also assume responsibilities for the Correspondent Services Corp. unit, which provides clearance and settlement services.

    Also, UBS PaineWebber created a new post, called director of strategic planning and new business development; PW tapped Luzius Cameron, former head of the UBS group strategic analyst team, for the post, effective June 1.

  • ‘William Molfetto is now manager of the Prudential Securities’ Park Avenue branch, Prudential's largest brokerage office. Molfetto, formerly the branch manager of Prudential's Austin, Texas, office, replaces Steve Wolf, who resigned.

  • Salomon Smith Barney scored a coup by picking up the multimillion-dollar- producing duo of Alex Phillips and Mike Schneickert. Both, who came from Morgan Stanley in early April, have the title of managing director of investment and are located in Los Angeles.

  • Elsewhere in the Solly Smith Barney world, Samuel Gilliland joined the Greenwich, Conn. office as a senior vice president of investments, having been wooed from Deutsche Banc Alex. Brown, where he served as a director.

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