Credit unions up their game in wealth management

As credit unions, caisse populaires and co-operatives flesh out their offerings, wealth management is becoming a major growth area — with at least three such organizations seeing two-year increases above 20%.

“The credit union industry has certainly put wealth management on the front burner over the last decade, and there’s been quite a significant increase in wealth management,” said Tim Nadelle, vice-president of wealth management with Toronto-based DUCA Financial Services Credit Union Ltd.

DUCA’s wealth assets under management (AUM) rose by nearly 60% over two years, to $505.0 million as of Dec. 31, 2021, up from $371.4 million a year earlier and $317.0 million at the end of 2019.

The firm has about 40 securities-registered advisors and eight mutual fund advisors, and offers a “full lineup” including mutual funds, ETFs, managed accounts, stock portfolios, fixed-income instruments, private investments and retirement and estate planning. DUCA refers customers who ask about life insurance to Aviso Wealth.

Out west, the agriculture sector is a major wealth management market for Calgary-based connectFirst Credit Union.

“Sometimes we’re working in rural communities where the population is 200 or 300. There are no other financial institutions in the community. [Clients are] often driving to larger centers,” said Kathleen Hurtubise, vice-president of wealth with connectFirst, formed in 2014 by the merger of First Calgary Financial Credit Union Limited and Chinook Credit Union Ltd. (Mergers with Legacy Savings and Credit Union Ltd. and Mountain View Credit Union Ltd. followed in 2017 and 2018, respectively.)

Amid that consolidation, connectFirst executives recognized that wealth management is “about helping people make better financial choices,” not just about investment products, Hurtubise said. Traditionally, credit unions focused mainly on lending and deposits with wealth management “off to the side of the desk to make a little bit of non-interest revenue,” she added.

ConnectFirst’s wealth AUM grew by 23% over two years, to $1.2 billion as of Oct. 31, 2021 (the end of its 2021 fiscal year), from $952 million a year earlier and $948 million as of Oct. 31, 2019.

At connectFirst, a “big strategic priority” is making digital services available to members “while providing real-time advice to those folks who want it and when they need it and how they need it,” Hurtubise said. In addition to financial planning, connectFirst offers tax and estate planning estate, business succession and insurance as well as a discount brokerage through QTrade.

Credit unions are “better tied into communities” than other segments of the financial services industry, suggested Doce Tomic, chairman and president of Markham, Ont.-based Worldsource Wealth Management, which announced the extension of an existing partnership with Surrey, B.C.-based Coast Capital Savings on Oct. 26.

A wealth management firm can get “strategic planning and alignment” by partnering with a credit union, Doce said. “As the credit unions have grown and have had a stronger foothold, not only in retail banking, but also in business and commercial banking, the values of being entrenched in the community and being a member and an owner of the credit union, to those individuals that specifically deal with them, is very important.”

Worldsource declined to share AUM growth figures, but a spokesperson said Coast Capital and Worldsource have “made each other’s businesses stronger for 14 years and look to continue doing so for many more to come.”

For its part, Levis, Que.-based Desjardins Group offers both private wealth and a full-service brokerage to high-net-worth clients, said Nader Guirguis, vice-president of wealth management strategic development with Desjardins Wealth Management. He added that Desjardins is “well organized” to grow in wealth management in Ontario, where the credit union launched in 2020 following a merger of caisses in the province.

Wealth management assets placed with Desjardins Group across Canada have increased by 32% over two years, to $91.3 billion at the end of 2021 from $77.5 billion a year earlier and $67.5 billion at the end of 2019.

Desjardins also offers wealth management in a “packaged format” to “mass affluent” clients with roughly $250,000–$2 million to invest, though the complexity of the financial situation rather than assets is primarily what defines market segment.

In 2020, Guelph, Ont.-based Co-operators Financial Investment Services registered with the Mutual Fund Dealers Association, and at least 600 of its advisors are now licensed to sell both life insurance and mutual funds, said Lucilla Nardi, chief distribution officer with CFIS.

The firm offers seg funds, mutual funds, and critical illness, home and auto insurance, Nardi said, adding that CFIS looks at a client’s “holistic” financial picture. CFIS doesn’t publish wealth management figures and declined to share specific growth targets, but said it wants to “grow significantly” in wealth management.