Better Service Through Referrals: How Credit Unions Can Drive Wealth Management Access

Amid the industry’s constant evolution, relationships continue to be the primary factor driving results. In particular, deepening relationships through wealth services referrals has proven to be a powerful growth lever. Customers who use the investment services of their primary financial institutions hold over twice as many assets with those institutions compared to customers without investments.¹ More than three-quarters of investment customers remain with their financial institution for at least a decade.²

Yet, many institutions today still struggle to connect their retail customers and members with financial advisors in a meaningful, scalable way: Less than 1% of retail households are referred to wealth teams each year.³ Why are so many institutions missing this massive opportunity?

Part of the answer lies in the evolution of the credit union and wealth management landscape. Over the years, in-person visits to credit union locations dropped precipitously, with more and more members taking advantage of online banking, call centers, and ATMs. The decline of foot traffic to physical locations threw a wrench in the traditional referral process. Tellers and members service representatives could once easily introduce members to financial advisors who sat just a couple of desks away.

Remote banking doesn’t offer the same opportunities for referrals. The good news is that if credit unions undertake efforts to modernize their referral processes, they can create new, effective pathways for wealth management growth.

Let’s take a closer look.

Obstacles to Wealth Management Referrals

LPL Financial has conducted extensive research to determine what stands in the way of wealth services referrals today. We found five key areas institutions must address to improve referral rates and position their organizations to strengthen and grow wealth management relationships in the current environment.

• Leadership alignment: Too often, leaders in the retail side of the credit union and bank are not aligned with those from wealth management, hindering wide adoption of referral efforts.
• Member awareness: Credit union members often don’t know that their credit union offers investment services or they don’t understand the value that financial advisors bring. Raising such awareness doesn’t only happen at branches; credit unions can leverage their websites and online banking to educate members on the benefits of investment advice and wealth management.
• Lead management processes: Achieving scale in lead management requires established processes, but nearly half of respondents in LPL’s Lead & Referral Management Survey said they don’t have a well-defined lead management process.⁴
• Adequate systems and technologies: Institutions need the right systems and technologies to support the lead management process, but, this is rare: Just 8% of LPL survey respondents said their institutions had “excellent” lead management capabilities.
• Program visibility and oversight: Monitoring progress on objectives can help leaders identify bottlenecks and other problems, but most institutions don’t yet have that visibility. Less than a third of survey respondents said they measure the success of their lead efforts.

Building a Modern Referral Program

Credit unions can jumpstart or revamp their retail-to-wealth referral efforts by embarking on a modern, systematic approach. An organized, formal referral process can help leaders and their teams to expand member services and improve their financial well-being through wealth offerings.

Here are some important steps credit unions should consider:

• Defining roles and responsibilities: Promoting alignment between retail and wealth leaders starts with all parties developing an understanding of what roles they each should play in successful referral programs.
• Assessing unique needs: A referral program should be tailored to the specific needs and goals of an individual credit union, including aligning with the credit union’s mission and supporting the full financial lifecycle of each member.
• Adopting referral technology: The right centralized platform can enable branch employees to send referrals to financial advisors while also providing CRM-like capabilities that allow advisors and managers to track the referrals and pull reports.
• Training staff and advisors: Branch employees, call center staff, and financial advisors should receive comprehensive training on using referral platforms and on pursuing referrals through all entry points, such as lending, business services, business development, and online banking. Branch employees and call center staff should also learn how to identify prospects, while advisors would benefit from insights into sales, tracking, and nurturing leads from branch teams.
• Measuring performance: Regular monitoring of referral efforts and progress toward core goals across business lines — from departments down to individuals — is critical to spotting trouble spots early on and course-correcting as necessary. Reporting tools for tracking referrals, advisor sales activities, and outcomes can create visibility into program performance and support coaching conversations.

LPL works closely with credit unions to establish modern referral programs that deliver real value in today’s evolving landscape. That value is about more than just generating leads; it’s about creating a culture of collaboration between retail and wealth teams, empowering advisors, and delivering better outcomes for members. 

For more information, please reach out to your Client Success Manager.