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CUs Need to Actively Engage Gen X and Y
Wednesday, February 19, 2014 6:45 AM

CUNA National Member Survey Results

A tremendous amount of wealth is going to change hands through inheritance in the next 10 years, and the indicators are not good that credit unions will retain this wealth unless they start actively engaging Generation X and Generation Y now, according to David Polet, CUNA Mutual Group’s voice of customer director, and Gary Weuve, CBSI’s Center for Advisor Excellence vice president and author of “Close More Sales in Financial Institutions: 12 Keys to Success.”

“Research shows 71 percent of 18-24 year olds have little to no knowledge of credit unions,” said Polet, “and that’s a problem because this generation will be critically important to the future of your credit union in the years to come.”

Thirty-trillion dollars will be transferred to Gen X and Gen Y from Baby Boomers during the next 30 to 40 years, making it an even larger wealth transfer than prior generations, according to Accenture’s “The ‘Great’ Wealth Transfer” 2012 white paper.

“Seize this opportunity. Encourage current members to bring their kids into the discussion regarding inheritance,” suggests Weuve. “This will help create awareness, and establish an opportunity to become the advisor of choice when the wealth transfer is ready to occur.”

Despite common myths, Polet says Gen Y is not a collection of lazy, narcissistic, self-promoting whiners; instead, they are hard-working, creative, collaborative people with a high awareness, and interest in engaging in financial management.

“The impacts of the dotcom bubble and great recession have scarred them, and made them much more skittish about investing,” said Polet. “However, Gen Y and Gen X are highly open to seeking advice, and are much more likely to get that from their credit union, or primary financial institution, than older credit union members.”

Seventy-eight percent of Gen X and Gen Y who worked with an advisor contributed to a retirement plan as opposed to only 43 percent who did not work with an advisor (Source:  “LIMRA: Top 5 Ways Gen X and Y Consumers Can Improve Their Chances for a Secure Retirement”, April 18, 2013).

Polet and Weuve encourage credit unions to begin building relationships with Gen X and Y by providing services, not just new technologies, that appeal to how Gen Y thinks about finances since 71 percent of Gen Y will set-up a retirement account before age 26, and 60 percent plan to open a college fund at the birth of each of their children (Source: CUNA Mutual Group’s “Be in the Moments,” 2013).

“The most important thing is just start creating awareness and opportunities to bring Gen Y and Gen X into the investing fold,” said Weuve. “Start by offering them life insurance. They’ll be open to it, and it gets them in the door.”