Adult Kids Are Returning to the “Nest” in Record Numbers, But Do They Know Its Financial Impact on Their Parents?

When one of my friends recently told me her nephew who’s in his mid-20s was temporarily moving with his girlfriend to her parents’ home to save money and pay down their student loans, I had flashbacks of my own family doing the same through several generations. My brother temporarily moved back to my parents’ house with his very pregnant wife and very large dog back in the late ‘80s, and my parents did the same when they were new parents.

In order to give my friend some unsolicited (!) advice for her nephew, I called my mom to ask what their financial arrangements were way back when. Turns out both my brother and parents were freeloaders! All kidding aside, my parents did not pay rent to my grandparents and, in turn, my parents gifted rent-free accommodations to my brother and sister-in-law.

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Holistic Wealth Management Services

Originally posted in The Federal Credit Union magazine.

By Barry Dayley, Executive Vice President, Money Concepts

Money Concepts is the NAFCU Services Preferred Partner for Turnkey Financial Planning & Wealth Management Solutions

Structural changes in the banking industry initiated by consumer demand and the convergence of financial services have forever changed the credit union landscape. In the past 2½ decades, the depository institutions’ share of total U.S. household financial assets fell 44 percent, to 12.4 percent, while the share of mutual funds increased 16 times, to 11.4 percent. This fact, coupled with the ever-increasing commoditization of traditional banking products and banking services offered by non-bank competitors, poses a real threat to a credit union that is not able to address wealth management needs. Today, nearly all large financial institutions in the world offer some semblance of what they refer to as wealth management as part of their Private Banking platform.

In fact, wealth management services are reportedly being provided by 83 percent of large banks, 63 percent of medium-sized banks and 49 percent of small banks. However, many of these organizations simply offer investment products or access to online financial planning calculators and count that as wealth management services. To compete in this space, a credit union must offer real and practical solutions.

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Gamification: Three Steps to Foolproof Engagement

Originally posted in The Federal Credit Union magazine.

Guest post written by Wayne Conte, Executive Vice President, Affinion Group

Affinion Group is the NAFCU Services Preferred Partner for AD&D Insurance, Enhanced Flex Checking, and Identity Theft Protection.

Although the concept has been around for decades, the term “gamification” was coined in 2002 and exponentially gained popularity around 2010. Gamification is the use of game mechanics to engage users and influence behavior. It’s widely used for diverse applications in marketing, education, loyalty building, productivity boosting, security authentication, incentive programs, and more. Chances are you already participate in several gamification programs.

One example of gamification dates back to the 1980s, when the airlines launched their frequent flyer programs. The result is millions of participants earning points or miles in exchange for their loyalty. The airlines quickly determined that air travelers were more interested in achieving elite status than earning rewards. Leveraging the consumer’s need for status —or achievement— is demonstrated in other gamified applications such as receiving endorsements on LinkedIn and “likes” on Facebook, earning badges on TripAdvisor or Yelp, becoming a mayor on Foursquare, or tracking fitness activities with the wearable Jawbone.

According to a Gartner report, more than 70 percent of the Forbes Global 2000 companies will have at least one gamified application by 2014. These companies will invest billions of dollars over the next few years to implement gamification and, ultimately, differentiate themselves through gamification strategies. As consumers become more accustomed to gamification in their everyday lives, it makes good business sense for you to engage both your members — and your employees — in the same manner.

Here’s how to get started:

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Social Media: Not Just a Passing Fad

By Nikki Griggs, Marketing Manager, NAFCU Services.

What do Tickle Me Elmo, Ed Hardy, and the Atkins Diet have in common? They are all fads! They have come in gone in their 15 minutes of fame. Many believe social media to be just another fad. But contrary to these beliefs, social media is more likely a trend. You may be thinking, “Aren’t fads and trends the same thing?” True, these terms are similar in that they both refer to new and popular items, but trends, unlike fads, have staying power.

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At the 2013 NAFCU Annual Conference, Kristy Grayson of Deluxe Financial explained that social media may be a newer form of communication, but that does not hinder its relevancy or power, especially as social media continues to evolve. Many credit unions may be wary to engage in social media. As social media continues to percolate through the population, regardless of age or demographic, it is becoming increasingly important to adjust and revise marketing plans to include social media strategies and tactics for a well-rounded marketing campaign.

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How Credit Unions Should Evaluate their Insurance Providers

In order to offer members all the great solutions that your credit union does, it’s likely that you’ve found it beneficial to rely on third-party providers. Oftentimes, agreements with these vendors automatically roll over when they are up for renewal as a matter of course. One reason is that it can be challenging to perform an in-depth review, especially in complicated areas like insurance. However, taking the time to analyze the vendors your credit union works with ensures that their solutions are providing members with what they need, as well as delivering value and revenue to your credit union.

Where do you start with this evaluation? When it comes to insurance, a good place to begin your evaluation is with ratings. We look at ratings for a lot of things in life—fine wines, TV shows, movies—why not use them to help evaluate your vendors? Allow me to provide an example. In a recent podcast that we did with Securian Financial Group, we delved into the importance of ratings when choosing or re-evaluating insurance providers. The financial condition of many insurance providers is evaluated by up to 4 major ratings agencies (Moody’s, Standard & Poor’s, Fitch and A.M. Best).  Each of the  ratings agencies look at several different factors—from assets and liquidity, to capital, to how risk is managed, and many others.

We can debate which rating agency offers the best analysis, but looking at all of them gives you a good idea of the company’s background and financial stability. This is critical to determining long-term value—which is what you both want and need in an insurance provider. Cost and revenue aside, the one thing that is non-negotiable in an insurance provider is financial stability. Without that, all you have are empty promises.

Next, you want to look at how the vendor is meeting your needs. Ask the right questions: Is this solution satisfactory? Is this solution really doing everything you intended it to? Is the solution yielding all the revenue promised or that is possible? And maybe most importantly, is there someone else offering this solution that can do better?

There are always changes in the industry and constant improvements are a part of that. It’s critical that your third-party providers are keeping up. Of course, cost and revenue factor into this as well. Is this vendor providing you the best value, and/or the most revenue? Could you be using another provider that would cost the credit union less or yield greater revenue without sacrificing quality and long term value?

So, before you renew that Agreement, pencil in some time to evaluate that vendor, using these and other tips outlined in the podcast. You may be surprised at what you find.