$825M credit union wealth program jumps to Ameriprise before CUNA’s move to LPL

A sometimes overlooked wealth management sector spanning thousands of banks and credit unions is turning into one of the most in demand for industry giants’ recruiting.

With the goals of boosting their own wealth management services and adoption among their substantial client and member bases while retaining their most productive advisors, the institutions are changing their approach and driving significant recruiting activity. Two banks’ moves to a new broker-dealer represent the largest moves in the independent channel in 2020 and an upcoming switch by a credit union is set to be the biggest one next year. Still, just 25% of roughly 10,000 or 11,000 banks and credit unions nationwide offer wealth management, according to Jay McAnelly, vice president of Ameriprise Financial Institutions Group.

Ameriprise, a firm that only began its specific outreach to bank and credit union-based investment programs after a 2017 acquisition, scored a major win when Randolph-Brooks Federal Credit Union agreed to bring RBFCU Investments Group to Ameriprise next month. While rival LPL Financial has picked up, by far, the largest recruiting prizes in the channel, Texas-based RBFCU chose Ameriprise for its group of 14 advisors managing $825 million in client assets. The credit union has spent more than two decades with its prior BD, CUNA Brokerage Services, which is going to LPL in 2022.

“We were really getting to scale and we needed significant technology advancements from a broker-dealer standpoint that became even more prevalent when COVID hit,” Edward Bronnenberg, RBFCU’s senior vice president of credit union service organizations, said in an interview. “The need for the technology is really what pushed us to make that final decision.”

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San Antonio-area RBFCU had considered a new BD twice in the past decade, and the 975,000-member credit union’s goals for the future underscore the often-untapped potential of the sector: Bronnenberg says only about 1% of the members are wealth management clients. If the share rises to just 5%, the program would grow to $3.5 billion to $4 billion in client assets, he estimates. The firm interviewed LPL as part of a roughly eight-month due diligence process last year, but it opted for Ameriprise before CUNA Brokerage announced its move to LPL.

Individual enterprises within larger organizations or practices within offices of supervisory jurisdiction often break off in their own directions after M&A deals or major recruiting moves. LPL itself grabbed a major OSJ from a rival’s incoming group after a big acquisition earlier this year, and the firm unveiled an incoming practice this week that left Ameriprise. Representatives for CUNA and LPL declined to comment on RBFCU’s move.

In addition to the growing interest among giants like LPL and Ameriprise in serving as a third-party service provider to the institutions, banks and credit unions face recruiting and retention challenges for advisors and their existing wealth management assets, according to Jacqueline Campbell of Chicago-based Alexander Legacy Private Wealth Management. After starting as a high school intern with a bank in 1993 and working her way up to managing private client advisor teams with billions of dollars in client assets at another institution, she launched an independent practice with Carson Group in April.

“There's really no succession planning for people who have spent a long time there,” Campbell says of institution-based practices. “People are now looking to break away from that traditional bank program where they were.”

Ameriprise joined the industry struggle for assets and advisors in the sector by purchasing Investment Professionals in 2017, notes McAnelly, who is also the former CEO of the acquired firm. About 60 to 70 advisors and 10 to 15 institutions will join Ameriprise’s institutional division this year, including the largest credit union in Idaho and other upcoming recruits, he says.

“Credit unions and institutions have made technological advancements for their clients; they're looking at broker-dealers and saying, ‘You have to make those advancements, as well,” McAnelly says. “Our pipeline looks amazing right now.”