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CBSI Paper: Investment Relationship Boosts Loyalty 40%
MADISON, Wis. (8/2/13)--An investment relationship with a credit union increases member loyalty by more than 40%, which helps cement the overall member relationship and lock in additional years of revenue from credit union services, according to a white paper published by CUNA Brokerage Services, Inc.
 
"The Opportunity for Credit Unions in Investment and Life Insurance Services," based on research and analysis by Kehrer-Saltzman and Associates, examines key demographic and financial characteristics of credit union households and how they use financial service providers.
 
Almost two-thirds of credit union member households surveyed would prefer a credit union to be their primary place to bank if it offered a full range of financial services, the paper said.
 
Once a credit union has established itself as the primary financial institution for a household, it enjoys a wide loyalty advantage, compared with households that look to a commercial bank for their financial services, the paper said. While 44.2% of all credit union households say they would not consider switching to another financial institution, that number jumps to 63.2% if households have purchased investments from a credit union they consider their primary place to bank. More than half of the credit union member households with purchased investments and life insurance at any credit union say they would not consider switching.
 
"This loyalty influences where the household turns when it seeks financial advice," the paper said. "Households that consider their credit union to be their primary provider are significantly more likely to turn to their credit union for advice about a windfall than are households that consider a bank to be their primary financial services provider."
 
Trust in credit unions is strongly correlated with the purchase of investment or insurance products. Households that purchased these products are 62% more likely than all U.S. households to have a great deal of trust in credit unions.
 
Household that have purchased an investment or insurance product from the credit union they consider their primary source of financial services are 74% more likely to have a great deal of trust in credit unions than the general population.
 
"The immense trust advantage that credit unions enjoy over other financial institutions must be counted among credit unions' true strengths," the paper said. "It also represents an important opportunity for credit unions to leverage their trust advantage to sell more investment and insurance products to their members."
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