Credit Union Investment Advisors Want Me

[John Galt III]

I have about $170k in CD's at my credit union. Sometimes when I call up to renew a CD, at a nauseatingly low rate, like 1.75%, they ask me if I want to have an "investment advisor" call me about other options which would give me a better return on my money. Since I am salesmanphobic, I say no thanks. What sort of investments would they try to steer me into? Mutual funds? Annuities? As my disgust with low rates increases I may call them up, but I want to know what to expect first. Thanks for any input !

 

[GrayHare]

Sarcastic reply: they will steer you to whatever yields them the highest commission. In most cases, whatever they recommend you can replicate on your own for less cost if you have the time and desire to do the research.

 

[marko]

Without knowing your personal situation, a cynic might say that anyone with $170K in CDs needs an investement advisor.

 

[sunnysideup]

Oh I am so glad it's not just me and DH.

Our credit union does the same thing--I simply tell them it's the cash portion of the portfolio and we have other investments elsewhere. Seems to do the trick for us.

The first time it happened was when I was talking to the person at the branch about something simple, and she saw the amount we had in CDs in our 2 accounts. She commented that it was alot in such a conservative investment, and did we want an advisor to contact us about investing. My thoughts at the time were that the average American probably doesn't have too much in total savings, so they probably just assume our CDs are all we have and are trying to do us a favor. Whatever, we now have a standardized response!!

 

[JOHNNIE36]

Without knowing your personal situation, a cynic might say that anyone with $170K in CDs needs an investement advisor.

Why would you make that statement? I have about $300k in CD's averaging 4.5%. Is that a bad investment? Do I need an advisor also?

My reply to John Galt III would be that they will try to sell you something else such as annuties. This is usually what they push at those seminars for investment products. Something other than CD's where the advisor isn't making any money.

 

[Gotadimple]

And I would approach this problem entirely differently. Understand that customer service is seeing $170,000 as a lot of investable money.

When asked if you would like a call from a financial advisor, respond: No, but I would like the president of the credit union to call me.

Then, when he/she calls tell him/her that you feel as a member that the credit union is doing a disservice to its members by suggesting/pointing them to a financial advisor, from whom the credit union earns a referral fee. Suggest it would be better if the concerned employees ask if the member might want a referral to a fee-based certified financial planner for advice on how to increase the yield on his/her savings portfolio.

When the response is but that isn't our policy, you can also reply your policy isn't to deal with referrals from a credit union that isn't concerned with educating its members on managing their money.

(Off my soap box now).

-- Rita
confirmed credit union member
former president of the board of directors of a credit union

 

[Goonie]

My reply to John Galt III would be that they will try to sell you something else such as annuties. This is usually what they push at those seminars for investment products. Something other than CD's where the advisor isn't making any money.

The bank where we do most of our banking does the same thing. They're constantly trying to set us up with their 'financial advisor' (a.k.a. annuity salesman'). Ummm...No Thanks! "IF" I wanted to talk to him, "I" would initiate the meeting. Over the years I've accompanied my elderly Mom when she's gone in to meet with him, and all he's interested in is selling annuities and life insurance.

Whenever a CD has matured he has advised her against either rolling it over or getting a new one. It's always been "put it in an annuity". Yeesh!!!

 

[JOHNNIE36]

Not to get onto marko about "needing" an investment advisor if you are into CD's, but I think everyone's situation dictates their course for investing. Ten years ago I was 100% into stocks with Fidelity, but time and things change. I no longer have any debt and my only goal is capital preservation. I am almost 76 and at this age one needs to keep what they have. I can live off my pension, our social security, a mortgage we hold on property and the RMD's off the CD's. So I say again, circurstances dictate your investments.

 

[marko]

Why would you make that statement? I have about $300k in CD's averaging 4.5%. Is that a bad investment? Do I need an advisor also?

.

Welll, I did qualify the statement by saying that I didn't have all the information.

Having said that, my assumption (you know what they say about when you 'assume') was that this was a CD paying very low interest.

So, I'd be interested to learn where can I get a CD paying 4.5%!!!! (again, I'd have to assume these are very long-term/old CDs...not something available recently---and likely to expire soon--- but I'm open to be enlightened!)

As another poster noted though, I'd be calling the President of the CU asking for a better rate...with enough $$, I've learned that the rate is negotiable.

 

[KiraC]

You can always go listen to what they say and then say "no thanks" while you go collect more information about their recommended options. As long as they are not charging you to talk with their advisers, free advice may be a learning opportunity.

 

[Independent]

And I would approach this problem entirely differently. Understand that customer service is seeing $170,000 as a lot of investable money.

When asked if you would like a call from a financial advisor, respond: No, but I would like the president of the credit union to call me.

Then, when he/she calls tell him/her that you feel as a member that the credit union is doing a disservice to its members by suggesting/pointing them to a financial advisor, from whom the credit union earns a referral fee. Suggest it would be better if the concerned employees ask if the member might want a referral to a fee-based certified financial planner for advice on how to increase the yield on his/her savings portfolio.

When the response is but that isn't our policy, you can also reply your policy isn't to deal with referrals from a credit union that isn't concerned with educating its members on managing their money.

(Off my soap box now).

-- Rita
confirmed credit union member
former president of the board of directors of a credit union

Good reply from former CU director.

 

[Independent]

I have about $170k in CD's at my credit union. Sometimes when I call up to renew a CD, at a nauseatingly low rate, like 1.75%, they ask me if I want to have an "investment advisor" call me about other options which would give me a better return on my money. Since I am salesmanphobic, I say no thanks. What sort of investments would they try to steer me into? Mutual funds? Annuities? As my disgust with low rates increases I may call them up, but I want to know what to expect first. Thanks for any input !

The mega-corp where I used to work had a unit that sold through credit unions. The most popular products were mutual funds (with sales commissions). The second volume seller was deferred annuities, but the volume was small relative to mutual funds. Other products we trivial in the sales mix.

If my employer is in that CU, you'll be talking to a commission-based sales person who is supposed to follow the "culture" of that particular credit union. Some are more member-focused, soft sell. Others are more aggressive. The most member-focused CUs (maybe Gotadimple's) are too skeptical of these programs to participate.

 

[rescueme]

Without knowing your personal situation, a cynic might say that anyone with $170K in CDs needs an investement advisor.

...

Unless these are CD's purchased decades ago (which I assume they were not), I would seriously look at your personal risk assessment.

 

[marko]

...

Unless these are CD's purchased decades ago (which I assume they were not), I would seriously look at your personal risk assessment.

Johnnie36 posted that he's getting 4.5% in CDs. The best I could find when CDs paid 4.43% was in 2008 on a 5 year. That means that in a year or so, he'll be SOL.

Unless there is some other insight that I'm missing....?

 

[Rustward]

I seriously do not understand all the self-inflicted wedgies people are giving themselves when they hear about somebody offering a product or a service. If you are not interested just say "no".

On most days that end in a "y" I am offered at least one product or service in person, through the mail, on a door hanger, on TV, on the internet, or on the phone. One can say no, throw it in the trash, change channel, get an adblocker, or hang up, then get over it.

And somebody said go talk to them because you might learn something, and that is true.

 

[frayne]

The thread should read;

Credit Union Investment Advisors Want My Money !

 

[d]

5% CDs, 10yr, PenFed CU, were available in early 2011 ... so another 8+ yrs to go!

 

[haha]

Why would you make that statement? I have about $300k in CD's averaging 4.5%. Is that a bad investment? Do I need an advisor also?

Nope; you need to be an advisor to others!

Ha

 

[haha]

And I would approach this problem entirely differently. Understand that customer service is seeing $170,000 as a lot of investable money.

When asked if you would like a call from a financial advisor, respond: No, but I would like the president of the credit union to call me.

Then, when he/she calls tell him/her that you feel as a member that the credit union is doing a disservice to its members by suggesting/pointing them to a financial advisor, from whom the credit union earns a referral fee. Suggest it would be better if the concerned employees ask if the member might want a referral to a fee-based certified financial planner for advice on how to increase the yield on his/her savings portfolio.

When the response is but that isn't our policy, you can also reply your policy isn't to deal with referrals from a credit union that isn't concerned with educating its members on managing their money.

(Off my soap box now).

-- Rita
confirmed credit union member
former president of the board of directors of a credit union

Well said Rita!

 

[FinanceDude]

I have about $170k in CD's at my credit union. Sometimes when I call up to renew a CD, at a nauseatingly low rate, like 1.75%, they ask me if I want to have an "investment advisor" call me about other options which would give me a better return on my money. Since I am salesmanphobic, I say no thanks. What sort of investments would they try to steer me into? Mutual funds? Annuities? As my disgust with low rates increases I may call them up, but I want to know what to expect first. Thanks for any input !

So do you turn them down on the advisor, then scream at them because they have crappy CD rates? Just wonderin'.........

 

[marko]

5% CDs, 10yr, PenFed CU, were available in early 2011 ... so another 8+ yrs to go!

Yeah, from what I've heard, participation was somewhat limited; lots of conditions had to be met (existing CDs in place etc) as this was a special promotion thing.

If you got in on it, good for you!

Not something anyone could get in on though. Not sure if a non Vet or non Armed Services person could even join this CU.

 

[JOHNNIE36]

Johnnie36 posted that he's getting 4.5% in CDs. The best I could find when CDs paid 4.43% was in 2008 on a 5 year. That means that in a year or so, he'll be SOL.

Unless there is some other insight that I'm missing....?

You're right, marko. I bought these 5 year CD's in 2009 @ 4.65% and they will mature in 2014. I'm hoping rates will be up a little in a couple years. One is an IRA CD and will have to do something creative with that money until rates rise. In the meantime, starting in 2014 we'll have to resort to the income we get off the mortgage we hold on our prior home. It also gets us 5.5% with the final payment due in 2020.

 

[JOHNNIE36]

Just a little story on learning about things I didn't know existed in CD's. Back about six years ago I wanted to get out of the market totally. I had to do something with my 401k at Fidelity. Found out they had a 5 yr CD at 5% (called a brokerage CD) and I rolled the 401k over into that CD as an IRA. A few months later I get a call from Fidelity and they tell me someone wants my CD and is bidding $8000 for me to sell it. If I agree, it stays on the market for a couple days until the bidding closes. I agree because this local bank is also offering 4.65% on a 5yr IRA. So I sold that "brokerage CD" at Fidelity, added $8000 to total and rolled it over to the local bank. I thought that was a great move. And I have to say that Fidelity went overboard in doing all the paperwork between them and the bank. Told me they would handle everything as a custodial transfer because I shouldn't really get involved in the funds as it might screw up the IRA rollover. Over the years I found that Fidelity did a great job of managing the 401k's for the employees. They now handle all the financial matters for the company.

 

[fritz]

And I would approach this problem entirely differently. Understand that customer service is seeing $170,000 as a lot of investable money.

When asked if you would like a call from a financial advisor, respond: No, but I would like the president of the credit union to call me.

Then, when he/she calls tell him/her that you feel as a member that the credit union is doing a disservice to its members by suggesting/pointing them to a financial advisor, from whom the credit union earns a referral fee. Suggest it would be better if the concerned employees ask if the member might want a referral to a fee-based certified financial planner for advice on how to increase the yield on his/her savings portfolio.

When the response is but that isn't our policy, you can also reply your policy isn't to deal with referrals from a credit union that isn't concerned with educating its members on managing their money.

(Off my soap box now).

-- Rita
confirmed credit union member
former president of the board of directors of a credit union

My wife was in supervisory positions at a couple of credit unions during her career. We're now retired (early). Credit unions by nature have a somewhat limited marketing ability (you have to be a member). The last credit union she worked for was very aggressive with marketing tactics. All employees were measured by how well they "sold" credit union services to members.

The top sellers of the year were rewarded with membership in an "Exclusive Club" and this was celebrated publicly at a dinner for those employees (paid for out of Credit Union funds). Upper management constantly praised those in the lead via broadcast emails to all employees, while supervisors quietly wrote up those not making their monthly quota of successful sales referrals to the various credit union departments.

FYI - some departments of some Credit Unions are actually representatives of unnamed outside companies (contract type employees) - particularly investment and insurance areas. The Credit Union gets a piece of the action for this service (not exactly what you'd call having "your" best interest at heart).

Employees were under constant threat of being dismissed if they failed to accomplish their monthly minimum required sales quotas. This type of pressure on employees to sell credit union services is why it has become annoying (at a lot of banks and credit unions) for their members to call or stop by to conduct business.

Thought I'd share this little tidbit of inside information for the next time you call or stop by your Credit Union or Bank - don't harp at the teller or person on the phone - they're just doing their job (under duress). You could request to speak with a manager and have that person add notes to your account information to stipulate that you not be bothered by employees with any marketing efforts. They don't want to lose your business.

 

[John Galt III]

Sarcastic reply: they will steer you to whatever yields them the highest commission. In most cases, whatever they recommend you can replicate on your own for less cost if you have the time and desire to do the research.

GrayHare,

That's what I thought. What I might do is open up a Vanguard account, and move some of my credit union CD money into it, as the cd's mature. I had the perfect world going for a while : Three 401k's with lots of options for investing, and a bunch of safe cd's at the credit union, at decent rates, but the rates are just getting too low lately. Thanks for the reply.

JG3