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Fee Income Through Wealth Management
C. Michael ThompsonNational Sales Director
Levi B. DayleyMarketing Director
Money Concepts International, Inc.June 9th, 2011
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It’s Getting Tougher to Run a Credit Union
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What Are Your Member’s Needs?
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What Are Your Member’s Fears?
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Psychographic Changes
Young Adult Families With Children
RetiredPre Post
HighNeed
LoansChecking
LoansInsurance
Info/AdviceInvestments
MediumNeed Investments
Info/AdviceChecking
InvestmentsInsurance
LowNeed
Info/AdviceInsurance
LoansChecking
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The Launching of an IndustryThe Sigmoid CurveThe Sigmoid Curve
Source: Financial Advisor Magazine, Thinking In 3‐D, by Monroe D. Diefendorf, Jr.
1980 2005
2020
Birth Stage
Innovation Stage
Commoditization StageA
B
A
A
B
“The Critical Epoch”
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Advisor adoption of fee-based
pricing
Pursuing more affluent clients
Establishing deeper client relationships
Benefits of recurring revenues
Preferable way to conduct business
Source: Cerulli Associates
Forces Driving Fee-Based Pricing
Credit Unions control about 30% of the member’s wallet, usually through Mortgages & CDs.
Overexposure to CDs hurts Member & Credit Union
The RELATIONSHIP is the most valuable asset of the Credit Union
What’s the Answer for You and Your Members?
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Balance Sheet vs. Off-Balance Sheet Assets
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Holistic Wealth ManagementWhat Is The Answer For Credit Unions?
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As in the case with any professional financial planner, the wealth manager’s focus is the client. His efforts are devoted to helping clients achieve life goals through the proper management of their financial resources.
WEA
LTH
MA
NA
GEM
ENT?
Wha
t Is
Wha
t Is
The practice of the wealth manager is holistic and individually customized.
Wealth Management is a specialty of financial planning.
What is Wealth Management?
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•
Retirement Planning
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Retirement Income Planning
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Estate Planning
•
Wealth Transfer
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Investment Management
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Asset Protection
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Senior Care
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Tax Planning
•
Family Issues
•
Charitable ConcernsW
EALT
H M
AN
AG
EMEN
T?W
hat I
sW
hat I
sWhat is Wealth Management?
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It’s All About Helping People Three WaysIt’s All About Helping People Three Ways
TransferMoney To
Loved Ones
AccumulateMoney More
Efficiently
Produce Greater Income – Reduce Taxes
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Ages 0-20 Ages 71 +Ages 61-70Ages 51-60Ages 41-50Ages 31-40Ages 21-30
Lending Savings Insurance &
Investments
Life Planning
Traditional Credit Union PlatformIntegrated “Member Centered” Approach
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THE TRADITIONAL INDUSTRY PARADIGM THE TRADITIONAL INDUSTRY PARADIGM Lending & Financial Services
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PARADIGM PARADIGM
THE WEALTH COACHTHE WEALTH COACH“YOUR Credit Union”
Credit Union
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PARADIGM PARADIGM
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Assumptions
1st Year Commission ‐ 6%
Trail ‐ .25%
Annual Fee – 2%
Payout 75%
$1,000 Annual Enterprise Fee
Commissions Vs Fees
What do you have to do to become the wealth
manager?
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Critical Considerations•• ProductsProducts•• Marketing SystemMarketing System•• TechnologyTechnology•• Compliance SupportCompliance Support•• TrainingTraining•• Turnkey SystemTurnkey System•• FlexibilityFlexibility•• Fee IncomeFee Income•• Management SupportManagement Support
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Non-Proprietary Product Portfolio
• Mutual Funds• Stocks • Bonds• Discount
Brokerage Services• Real Estate
Investment Trusts
• Insurance ProductsLifeDisabilityLong Term Care
• Variable Annuities• Asset Management• Hard Assets
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Marketing Support
State-Of-The Art Relationship Oriented Marketing using...
• Marketing Campaigns• Conceptual Presentation• Educational Information• State Of The Art Technology• Wealth Management Approach
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Seminar & Seminar & Workshop TopicsTopics
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Automated Solutions
•Integrated Trading Platform
•Document & Blotter Automation
•Financial Planning Software
•Compliance Tracking
•Investment Research
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Compliance• Interagency Statement on Retail
Sales of Non-deposit Investment Products - February 1994
• Gramm Leach Bliley Act• FINRA Rule 2350• Regulation R• Periodic Compliance Check-Ups• Written member Disclosure• Staff Training
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Complete Curriculum
Seminars
Symposiums
Workshops
In Person & Online
Modular Design
Ongoing Education & Training
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The Gonzalez Family
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CASE 1Gonzalez
Original Amount
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Disability Income Insurance $45 / MO $540 $54 $54 $54 $54 $756
Life Insurance
$100/ MO $648 $108 $108 $108 $108 $1,080
Systematic Investment
$50 / MO $18 $18 $18 $18 $18 $72
Total$1,206 $180 $180 $180 $180 $1,908
The Gonzalez Family
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The Jones Family
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CASE 2Jones
Original Amount
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Lump Sum Investment
$37,000 $592 $639 $691 $746 $805 $3,473
Life Insurance
$1,100 $660 $110 $110 $110 $110 $1,100
Systematic Investment
$300 / MO $144 $144 $144 $144 $144 $720
Total$1,396 $1,443 $945 $1,000 $1,059 $5,293
The Jones Family
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The Wells Family
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CASE 3Wells
Original Amount
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Asset Management
$1,250,000 $10,000 $10,800 $11,646 $12,594 $13,605 $58,666
Life Insurance
$25,000 $16,250 $2,500 $1,250 $1,250 $1,250 $22,500
Long Term Care
$6,000 $3,300 $600 $600 $600 $600 $5,700
Total$29,550 $13,900 $13,514 $14,447 $15,455 $86,866
The Wells Family
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Holistic Wealth Management:
Earn Fee Income for Your Credit Union While Serving and Preparing Your
Members Better For Life.
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Money Concepts International. Inc.
11440 N. Jog Road
Palm Beach Gardens, FL 33418
www.NAFCU.org/MoneyConcepts
Michael ThompsonNational Sales Director
Tel: (561) 472.2000 Ext: 5070
All Securities through Money Concepts Capital Corp. Member FINRA/SIPC
Money Concepts Advisory Service is a Registered Investment Advisor with the SEC
All Non Securities and Non Advisory Products through Money Concepts International, Inc.
Providers of Financial Services Since 1979
THANK YOUThank You!
