Review of CUNA Brokerage Services

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Updated on Friday, April 30, 2021

CUNA Brokerage Services, Inc. is a dually registered investment advisor and broker-dealer headquartered in Waverly, Iowa. The firm generally provides its services through financial services networking agreements with different institutions across the country, the majority of which are credit unions. Currently, CUNA Brokerage Services has more than 700 employees on staff and over $3 billion in assets under management (AUM).

All information included in this profile is accurate as of April 30, 2021. For more information, please consult CUNA Brokerage Services’ website.

Assets under management: $3,029,704,984
Minimum investment: Varies by account type
Fee structure: A percentage of AUM; hourly charges; other fee types
Headquarters: 200 Heritage Way, Waverly, IA 50677
https://www.cunamutual.com/products/investments/cuna-brokerage-services/individual-investors
319-352-4090

Overview of CUNA Brokerage Services

CUNA Brokerage Services is a wholly owned subsidiary of CUNA Mutual, which was founded in 1935 as a credit union. CUNA Brokerage Services was established later, in 1983. It operates separately as an advisor, although many of its services are often based inside credit unions.

CUNA Brokerage Services is registered to serve clients in all states, with the exception of Wyoming, and in the District of Columbia. It has 262 physical locations across the country.

Of the company’s 748 employees, 586 provide investment advisory functions. In addition, 586 employees are licensed insurance agents and 748 are registered representatives of broker-dealers.

What types of clients does CUNA Brokerage Services serve?

CUNA Brokerage Services primarily serves individual investors, including those who are high net worth individuals (defined by the SEC as those with at least $750,000 under a firm’s management or a net worth of at least $1.5 million). The firm also works with businesses, charitable organizations and pension and profit-sharing plans, though it serves relatively few of these institutional clients when compared to its number of individual clients.

Minimum account balances required for managed portfolios will vary, dependent on the advisor and strategy selected. Mutual fund accounts and ETF accounts may also have varying minimum investments.

Services offered by CUNA Brokerage Services

CUNA Brokerage Services offers client portfolio management services through its own platform, as well as through programs sponsored by other investment advisors. In addition, CUNA Brokerage Services offers financial planning and consultation services, and can also help with trust management. The firm also provides advisory services to employee benefit plan sponsors.

Here is a full list of services that clients can access through CUNA Brokerage Services in its role as an investment advisor:

  • Portfolio management
  • Financial planning
    • Retirement planning
    • Asset allocation
    • Education planning
    • Credit management
    • Net worth management
    • Cash flow forecasting
    • Life insurance
    • Disability planning
  • Employee benefit plan advisory services

How CUNA Brokerage Services invests your money

CUNA Brokerage Services offers clients the ability to choose from different platforms and portfolio programs. The firm decides which offerings are included in its available programs and platforms.

Clients can choose from the available platforms and programs, and their investment advisor representative will then provide advice on which investments to use in the portfolio based on the client’s goals and risk tolerance. Depending on the program chosen, there might be a reliance on mutual funds and exchange-traded funds (ETFs), or there might be the ability to construct a portfolio of individual equities.

It is also possible for clients to choose programs with either discretionary and non-discretionary management. With discretionary management, clients give the firm the ability to manage their portfolios and make trades without first getting their approval. On the other hand, with a non-discretionary account, the investor must approve all trades before they are made.

Fees CUNA Brokerage Services charges for its services

Investment management fees: The fees CUNA Brokerage Services charges for its investment management services depend on the program or platform chosen by the client. In general, the firm charges a tiered fee based on a percentage of assets under management, with rates decreasing as the amount of assets under management increases. In addition, any mutual funds or ETFs used are likely to come with expense ratios.

It’s important to note that the firm’s programs also come with additional platform and third-party fees on top of the advisory fee charged by CUNA Brokerage Services. Total maximum fees for clients, including these additional charges, can range from 1.20% to 2.20% depending on the program selected.

Financial planning fees: Clients will pay a flat fee for financial planning services, with the rate negotiated between the client and the advisor. The flat fee can be up to $7,500 annually for the initial plan and up to $8,000 per year for ongoing financial planning services.

CUNA Brokerage Services’ highlights

  • Variety of investing programs and portfolios: CUNA Brokerage Services offers its clients a wide range of platforms and portfolio programs to choose from, which it then further customized based on clients’ individual needs. This gives clients a number of options to choose from to find an investing approach that suits them.
  • Credit union affiliation: Because CUNA Brokerage Services generally partners with credit unions, this can be a way to get your financial services in one place, especially if you use the services of a credit union in the firm’s network.
  • Broad geographical reach: The firm has over 260 locations throughout the U.S., and it is registered in all states (except for Wyoming), as well as the District of Columbia. This makes it accessible to consumers in many locations.

CUNA Brokerage Services’ downsides

  • Insurance and brokerage commissions: In addition to performing investment advisory services, many of CUNA Brokerage Services’ advisors also sell insurance products and are registered representatives of a broker-dealer. In these roles, advisors may earn commissions from the sale or recommendation of products. This can create potential conflicts of interest as employees may be financially incentivized to make certain recommendations.
  • Revenue sharing: CUNA Brokerage Services has revenue sharing agreements with various third parties, whose products they sell. As a result, an advisor might have a financial incentive to steer you toward certain products and services.
  • Additional fees: On top of CUNA’s advisory fee, clients also end up paying a platform fee and third-party fees related to the third-party strategists and programs chosen. These are fees that go beyond expense ratios and add to the overall cost of working with the firm.

CUNA Brokerage Services disciplinary disclosures

CUNA Brokerage Services has no major disciplinary actions on its record from the last 10 years. While there might have been disciplinary actions in the past, it’s no longer required to disclose them in its filings because of the amount of time that has passed.

For reference, the Securities and Exchange Commission (SEC) requires all registered investment advisors to disclose in their Form ADV whether the firm or its employees or affiliates have been subject to any disciplinary actions that would be material to a client evaluating the firm or the integrity of its management team. This includes any civil, criminal or regulatory actions that took place within the last 10 years.

CUNA Brokerage Services onboarding process

If you want to use CUNA Brokerage Services, you can find an advisor to talk to through its website. You can also do so by submitting a form that will match you with a local credit union, or by calling CUNA to get help finding someone to work with near you. Another option is to search for an affiliated credit union near you, if you’d prefer to meet with someone in person.

The process for onboarding depends, in part, on the program or platform you choose for investment management services. However, when you do enroll, CUNA Brokerage Services will help you to set up a separate account with a third-party clearinghouse for the custody of your account and the execution of trades.

Once enrolled, your advisor can help you figure out which program is likely to be suitable for you by taking into account your objectives and needs. You can expect to meet with your representative periodically to make sure you’re on track to meet your goals and to review the performance of your portfolio.

Is CUNA Brokerage Services right for you?

If you use other financial services at an affiliated credit union, and want everything from your banking products to face-to-face investment advice in one place, CUNA Brokerage Services may be worth considering. In addition, the firm offers a wide variety of investing programs and portfolios, which it will further customize to each client, as well as locations throughout the U.S.

However, it’s important to be aware of the fees charged by CUNA Brokerage Services. The firm’s fee structure is complex, and there are extra layers of fees that can get confusing for the average investor. In addition, advisors’ affiliations with insurance agencies and broker-dealers can create potential conflicts of interest. Before signing up, make sure you understand all of the costs involved to ensure you find an advisor who is right for you.