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Aging boomers pose challenges for CUs
MONTEREY, Calif. (3/20/08)--Baby boomer business is worth attracting and retaining, according to statistics provided to the California-Nevada Credit Union League at its annual Big Valley Educational Conference Wednesday. Heather Thiltgen, vice president of Consumer Segment Programs at CUNA Mutual Group, told that baby boomers are:
* Influential--78.2 million strong as the largest generation in U.S. history; * Rich--$46 trillion in assets, $17 trillion in investable assets, $3 trillion in spending power, $750 billion in discretionary income and $489 billion in annual IRA rollover dollars; and * Profitable--boomers will continue to freely borrow and spend throughout retirement.
“To determine how to approach this consumer segment, it’s important to know how they think, what drives them to make decisions,” said Thiltgen. “Knowing their characteristics will help us develop a successful strategy.” Based on her research, Thiltgen reported that baby boomers:
* Favor simple, customized options; * Are interested in staying young, healthy and active; * List improving their community and the world as top concerns; * Believe experience and convenience are more important than price; * Remain focused on their families, especially grandchildren; and * Are optimistic about the future.
Thiltgen suggested several strategies to attract and retain the baby boomer business:
* Build simple financial products that can be customized to a variety of needs and circumstances; * Help them save for sickness, based on their anticipated higher life expectancy; * Provide ways for them to finance their desire to stay young, such as home gyms, plastic surgery, dental procedures and travel; * Partner with them to improve the planet through increased green messaging, more volunteer programs and working to emphasize collaborative roots and shared values; and * Help their families by providing education savings accounts, home equity loans and credit monitoring.
“There are dozens of ways to provide enhanced products and services to baby boomers,” said Thiltgen. “Customizing those products to meet their needs while respecting their active lifestyles will help attract their business.” Joining Thiltgen was Sherry Reams, vice president of Investment and Insurance Services at Financial Partners CU (FPCU), Downey, Calif. Reams emphasized her credit union’s mission of building lifetime financial partners. “We want to be trusted advisors for the long term, not just product pushers or single service providers,” said Reams, whose credit union serves people who live or work in Orange or Los Angeles counties. “Our aging membership, as well as the aging country, requires us to shift our program emphasis.” Reams said providing complementary retirement road tests, establishing retirement centers in branches and placing greater emphasis on retirement services in marketing materials are just some of the ways FPCU is addressing the baby boomer market.
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