By Eko
Credit unions are showing growing interest in low-cost digital investing. Whether the goal is to reduce outflows to third-party platforms, attract younger members, or improve their online banking experience, digital investing is more than a feature. It drives measurable growth and changes how members engage digitally.
That said, one of the first questions credit unions typically ask is:
“We already have a relationship with LPL Financial, Raymond James, or Cetera Financial Group. Can we still offer digital investing?”
This is a fair question. Nearly every credit union we work with has an existing wealth management contract. In the few cases where an amendment was needed, it was straightforward. Most importantly, once advisors understand who digital investing serves, they do not see the platform as competitive. They see it as complementary and often ask for access. Here are the top three reasons why.
A typical wealth management program serves about 1 to 5 percent of a credit union’s membership. These members are advisor-ready and have the assets required to support a commission-based model.
That leaves 95 to 99 percent of members without a strong option today. These members have smaller balances, limited investing experience, and no immediate need for an advisor.
When credit unions do not provide a low-cost investing option, members go elsewhere for their investing needs, including Robinhood, Acorns, Betterment, Fidelity Investments, Charles Schwab, Vanguard, etc.
When credit unions offer digital investing inside online banking, they no longer have to “say no” to this group. Instead of taking on low-balance portfolios they do not have the capacity to support, advisors can redirect members to the digital offering while monitoring their growth over time.
Advisors often face a difficult tradeoff. They want to help everyone, but spending time meeting with someone who only has $500 to invest is not an effective use of their time.
Digital investing changes that dynamic. Instead of turning members away, advisors can direct them to a digital platform and stay connected as their assets grow. Members start with small balances, continue contributing over time, and can be flagged when they reach meaningful thresholds.
Capabilities like ACAT transfers also allow members to bring in outside assets from firms like Charles Schwab or Fidelity. As those balances grow, advisors can engage at the right moment.
What was once a dead end becomes a consistent source of warm leads. Advisors no longer have to say no and can reach out when the relationship makes sense.
Advisor-led wealth management is built around time. Meetings, planning, relationships, and ongoing support all require human involvement. For that reason, most financial advisors need portfolio sizes of $100,000 to $250,000 to make the relationship work.
At lower balances, the math breaks. A $5,000 or $10,000 account requires many of the same touchpoints, but generates a small fraction of the revenue. Advisors either spend time on accounts that are not economical, or they turn those members away.
Digital investing replaces manual work with software. Account opening, funding, portfolio management, and reporting are all handled through a self-service experience. That allows a credit union to support thousands of smaller accounts at a low cost, whether a member is starting with $10 or $10,000.
Wealth management is designed to deepen relationships once assets are established. Digital investing is designed to help members build those assets in the first place. When used together, the transition becomes natural. Members start digitally, balances grow over time, and advisors step in when a relationship makes sense.
Offering low-cost digital investing is a coverage decision. Wealth management serves members who already have assets. Digital investing allows credit unions to serve members who are still building them.
Together, they create a complete strategy across 100 percent of the membership. Credit unions that get this right are not replacing their advisors. They are giving them a stronger pipeline and expanding their reach.
If low-cost digital investing is something your credit union may be interested in learning more about, connect with the Eko team today.