When a credit union (CU) adds a Third-Party Registered Investment Advisor (TP RIA) to its list of products and service offerings, the result is the formation of a Primary Financial Institution (PFI). Many people may consider other financial institutions as their PFI, but credit unions offer unique benefits that often make them a better choice. When combined with the services of a TP RIA, credit unions can become a powerful financial ally.

An ordinary RIA is a professional advisory firm that provides financial planning advice and investment management services with typically a minimum account size of $250,000+.  RIAs are legally required to act in their clients' best interests, making them a trusted source for financial guidance.   We believe that the difference between most RIAs and a Third-Party RIA is the compliance expertise, understanding of SEC, NCUA, and State regulations, and the scale to provide digital and in-branch financial solutions for Members of all account sizes.

Here are some of the benefits of combining a CU and a TP RIA:

• Personalized Financial Advice: TP RIAs work closely with their clients to understand their unique financial goals and challenges. When paired with a credit union, members receive personalized financial advice tailored to their specific needs, ensuring they make the most informed decisions for their financial well-being.
• Lower Fees and Better Rates: Credit unions are known for offering lower fees and better interest rates compared to traditional banks. With a TP RIA, members are not charged on a transactional basis and do not receive commissions like broker-dealers.  Instead, members are holistically charged based on their investment portfolio.
• Comprehensive Financial Planning: TP RIAs provide an array of financial planning services that cover everything from budgeting and saving to investing and retirement planning as well as estate planning. By integrating these services with a credit union's offerings, members get a complete financial picture and a coordinated plan to achieve their goals.
• Trust and Fiduciary Responsibility: TP RIAs are fiduciaries, meaning they are legally obligated to act in their clients' best interests. This high level of trust ensures that members receive honest, unbiased advice that aligns with their financial objectives.
• Access to a Wide Range of Services: Credit unions offer a variety of financial products and services, including checking and savings accounts, loans, and credit cards. With the addition of TP RIA services, members can also access expert investment advice and management, creating a one-stop shop for all their financial needs.
• Community Focus and Support: Both credit unions and TP RIAs typically have a strong community focus. Credit unions prioritize member service and community development, while TP RIAs often emphasize personalized, client-centered service. Together, they create a supportive environment that prioritizes the financial well-being and success of their members.

Finally, in light of recent broker-dealer shutdowns, credit unions need a contingency plan to secure their primary financial institution status. Members need to know that their PFI will continue to meet their financial services and investment planning needs. Decisions made in haste could result in member dissatisfaction, higher costs, and the relocation of their accounts.

For those CUs without financial planning or investment management services, adding a TP RIA could be the winning formula.  From personalized financial advice and lower fees to comprehensive financial planning and a strong community focus, this combination can provide a solid foundation for achieving your members’ financial goals. Whether saving for college, planning for retirement, or simply looking to manage your finances better, your CU + TP RIA = a PFI as the smart choice for members’ brighter financial future.

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Priority Financial Group (PFG), is a third-party registered investment advisor (TP RIA) serving credit unions and financial advisors. The PFG team has been helping visionary credit union executives make member-centric, strategic decisions for more than 25 years. PFG is a pioneer in introducing the Charles Schwab and Fidelity advisory platforms to credit unions and has recognized industry expertise in implementing a best practices approach to taking credit union investment programs to their next level. For more information, visit www.pfgteam.com, call 800.405.8850, or contact CEO Mike Prior directly at Priorm@pfgteam.com.

Disclosure: The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.

Investment advice offered by PFG Advisors, LLC. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC.  Insurance products offered through approved carriers. PFG Advisors, Priority Financial Group, and Osaic Wealth, Inc. are separate entities.