Credit unions provide a “very respectful workplace”

“Our opinion is valued. Upper managers are loyal to and respect our needs. They listen,” explains one credit union account manager.
Another advisor lists “client communication, member service and integrity” as some of the best aspects of working for a credit union. “A very respectful workplace” is what a number of account managers give as a reason why they’re with their organizations.
“There’s a very good spirit, in terms of work ethic. The management has integrity,” says another.

These answers don’t come as a surprise to Don Rolfe, president and CEO of Vancouver-based Credential Financial Inc. and Ethical Funds Co. In an age of increasing instability because of mergers and acquisitions, he says, the turnover rate at credit unions is low. “In the account manager field, it’s no more than 5%. It’s a very, very stable force,” he says.

The above-average rating advisors give compensation reflects the contentment credit union account managers have with their payout structure. “We have base [salary] plus bonus,” Rolfe says. “They are compensated on volume and on customer satisfaction.”

Credit unions survey clients and ask if they are happy with the service they are receiving. Rolfe makes it clear that account managers are not paid more to sell certain products.

Rolfe says that credit unions have been spending more on sales support and training, two areas that show substantial increases from last year’s Report Card. Sales support increased to 7.2 from 6.6, and ongoing training to 7.8 from 7.0.

“Our sales support and training is probably up [in spending] about 15% year-over-year,” he says.

Some of the training programs launched this year deal with sales effectiveness, client segmentation and practice management. “That seems to be the one people are most interested in these days,” Rolfe adds.

Another area in which advisors scored credit unions highly in is pricing and availability of fixed-income products. They’ve given the former a top-place rating and the latter a second-place position.

Rolfe explains that Credential is moving toward managed account products and wrap-based products. “As a matter of fact, we place very little emphasis on selling individual funds,” he says. He adds that one of the most significant products launched this year, Credential Select, has become one of the best-selling products.

Account managers are quick to praise these areas.”The products are awesome,” states a credit union employee. “We are usually the leader in our little market,” says another account manager.

Account managers at the big banks are taking note. One advisor says that when it comes to pricing fixed-income products: “It sucks. We’re in line with the other banks, but we’re getting eaten alive by the credit unions.”

The approximately 600 credit unions across Canada are certainly being noticed by their competition. But while bank mergers present an opportunity for them, are they worried about the emerging competition from virtual banks?

“We have the highest loyalty factor across all firms in the marketplace,” says Rolfe. “People who deal with credit unions typically are comfortable dealing with credit unions.
We don’t lose clients to other banks. I’m sure we lose some [to virtual banks], but we’re not losing anywhere near the volumes the banks are losing to the INGs,” he adds, referring to ING Direct, one of the largest players in the virtual bank sector.

Credit union account managers appear to feel the same way. “We’re trying to sell our personal service. Older customers still want to deal with people,” one states.

“There are just two big virtual banks that give us competition, ING and President’s Choice Financial,” says another account manager.
“Once you explain to your clients what you don’t get with a virtual bank, they usually decide not to switch.”