Do You Practice Financial Wellness or Financial CPR?

Posted on May 15, 13 in Blog Financial

I’m no different than most people. I hate going to the doctor. Because they always remind me of the things I should be doing. You know…eat better, exercise, and lose a few pounds.

Fact is, I expect and respect the advice.  I appreciate the gentle nudge.

I’ve been wrestling with this issue for some time as it relates to member financial health. I’m trying to reconcile the credit union industry’s need and requirements for profits to make their business sustainable, with the consumer’s overall wellbeing (financial health), especially in the area of debt control, expense management and ultimately financial independence.

It wasn’t too long ago when the country was facing cataclysmic credit defaults. Our entire financial system was shaken to the core. We redistributed those losses into our currency, diluted the value of the US dollar and now we are watching the run up in credit once again.

Home prices are tracking up with demand outstripping supply. Auto loans are on the upswing.  Are happy days here again? If we learned anything from these events is that bad consumer choices, fueled by willing lenders lead to bad outcomes.

Like the patient that is directed to change behavior for health reasons, many members had been guilty of making bad decisions in their financial life and needed some form of therapy. Maybe financial CPR.

But have they changed?

As the loan buffet continues to grow and consumers are crowding at the table, how do we educate and protect members from a repeat of the mistakes of the past?

There has been new legislation. Greater transparency. Better information. The equivalent of food labeling laws have been added to industry products and services in the form of more disclosures.

But even so, what more can be done…what should be done, day in and day out?

One big idea floated around by our company during the early stages of the recovery was a “360 degree review” when a member applies for a loan. The review would accompany the loan application process. At the time of a new loan, the member service representative reviews the entire member portfolio…and provides comprehensive diagnostics. Imagine recommendations on everything that impacts the member’s financial health…savings, retirement, loan limits, and college savings.

What better place to come for this advice than your credit union? Your trusted financial partner. Imagine how powerful this can be to the member relationship. With full disclosure and a willing healthy dialogue, the relationship takes on a portfolio management mindset with goals and milestones that are trackable and visible.

A yearly financial physical would be in order as well.

Now the member service personnel role becomes one of a processor and a coach, with conversations about how they are progressing against their financial goals—have they been able to pay down some of their debt, reduce some exposure, increase retirement funding, etc?

Thinking like a personal trainer, every time a member visits, the credit union can check the member’s FWI (Financial Well-being Index – a hypothetical index created that is comparable to a Body Mass Index for weight).

I can hear the conversations now, “Hey Mr. Jones, good job. You’ve paid down that credit card balance. Your Index has improved by 5 points.”

The progressive credit unions are probably doing much of this now but we still have a long way to go.

Imagine if all financial providers thought like a doctor. First, do no harm…

Mark DeBellis

Originally Published on