Secrets of the Boomers Revealed CUNA Mutual’s 2009 Boomer Retiree Retention Study

1. Secrets of the Boomers Revealed CUNA Mutual’s 2009 Boomer Retiree Retention Study Jeffrey Hunt, CFP® June 22nd, 2009

2. Crisis

3. Members Historically Leave in Retirement Credit Union PenetrationU.S. Adults – Membership by Age CUNA National Member Survey 2008 Replaced by new, younger borrowers

4. A New Generational Reality Too small - Too poor - Too late

5. About Our Study Tom

6. Very likely to stop using Somewhat Likely to Stop Using Not likely to stop using Boomer Members Also Intend to Leave 17% fewer Members 5.6M Members = $617B in net worth

7. It is not where I conduct most of my transactions Not where I have most of my assets, investments and savings They are not convenient to use It is not where I receive financial guidance and advice Don’t offer wide enough range of financial products and services It is not where I have my insurance They do not offer good prices or rates Membership is only available through my current employer They are not easy to deal with Fewer planned transactions/spending/purchases Moving out of area/out of state They do not provide friendly customer service I do not trust them Why They Will Leave - Next 5 Years Daily relevance – Overall competitiveness

8. What About the Other 83%? Very likely to stop using Somewhat Likely to Stop Using Focus Group’s loyalty tenuous Not likely to stop using Five reasons they’ll leave over time

9. Reason to Leave #1 Jean’s moving her money

10. 5% 8% 28% 9% Credit Union Financial Advisor/Planner Mutual Fund Company Brokerage Firm 10% Bank / Savings & Loan Don't Know Other 21% 19% Reason to Leave #1: Consolidation Have not consolidated yet Have consolidated Simplify lives with someone else

11. Reason to Leave #2: Retirement Needs Old needs intensify - New needs appear

12. Reason to Leave #3: New Relationships/Offers Very Likely to Start Using Somewhat Likely to Start Using Excited by new services

13. Reason to Leave #4: Richard’s relationships

14. Reason to Leave #4: Existing Relationships Already with the competition

15. Reason to Leave #5: Members on their PFI

16. Reason to Leave #5: Strongest Relationships 59% other PFI Most think of someone else first

17. Summary: How Much of Your Membership is Safe 83% Members intent on staying 41% Pct. considering CU as PFI. Pct. who only use a CU 12% Few faithful to credit unions

18. Understand Them and Win

19. Members Optimistic About Their Financial Abilities % Top 2 Box: 92% 90% 86% , 72% 70% 63% I have a positive I am in control I am in control I don't live depend on I manage my money I enjoy reading about self-image of my life of my finances the next paycheck well and expect good finances and ways to results better manage my money Boomers will pay to remain positive

20. Biggest Concerns Understanding Dennis and Linda’s Concerns

21. 3.9% 2.2% 1.0% 6.1% Economic situation 7.7% Health 36.5% Funds for retirement Expenses Government Employment None / Don't Know 18.3% Other 24.3% Biggest Concerns They seek health care and retirement income

22. Specific Worries Understanding Tom’s retirement readiness

23. Specific Worries Leave their home during retirement – 88% Manage retirement savings by myself – 66% Unprepared for future health care – 64% Long-term financial insecurity – 55% Poor health will effect retirement income – 54% Unprepared for retirement – 54% Lower standard of living – 44% Need retirement experts to prepare them

24. What They Want From PFI Shari and Jean want more retirement options

25. Products and services that leave me in control of my financial decisions Someone who focuses on providing me with advice rather than on just selling to me The variety of financial products that meets all of my needs Someone who can give me retirement answers in language I understand Income-generating investments that I don’t have to manage all the time A place for me to simplify my finances and deal with fewer institutions Options for me to roll-over and combine my retirement savings A range of investments from guaranteed to aggressive Someone to help me keep my retirement on track Ways to supplement my retirement income Products/advice to help ensure I can finance health care in retirement Insurance to protect me and the things I own Information to help me understand my options under Medicare Advisors to help me understand my retirement health care options Products/services that allow me balance my needs with leaving something for my heirs % Top 2 Box Products/advice to help ensure I can cover the costs of prescription drugs in retirement Loans so that I can keep borrowing, if necessary Options for health insurance coverage until I’m eligible for Medicare What They Want From PFI With retirement products and advice

26. Four Factors to Increase Purchases Value Boomer Needs Simplicity Products Advice New business model

27. Would be much more likely to purchase from CU Would be a little more likely to purchase from CU Would not make a difference Value Offer Lower Price or Discount Price - Benefit

28. Would be much more likely to purchase from CU Would be a little more likely to purchase from CU Would not make a difference Simplicity Pre-shopped, Easy to buy Convenience sells

29. Advice Jean really wants advice

30. Would be much more likely to purchase from CU Would be a little more likely to purchase from CU Would not make a difference Advice Free Advice - Standing by Help on their terms

31. Product Member Awareness of CU Offers Savings - Loans

32. Product What has changed with Al

33. Product Interest in Buying 81% CDs, Money Market, and Savings Accounts 62% Stocks, Bonds, Mutual Funds 60% IRA or Roth IRA 56% Health Insurance 55% Auto/Homeowners Insurance 50% Medicare Part D 50% Long-Term Care Insurance Medicare Supplemental Insurance 49% 42% Medicare Advantage 42% Consumer Loans Annuity 41% 36% Life Insurance 30% Home equity loan/line of credit 27% Mortgage % Top 2 Box 12% Reverse Mortgage Income – Insurance - Loans

34. Members want help with care

35. CDs, Money Market, and Savings 55% Consumer Loans 52% IRA or Roth IRA 38% Stocks, Bonds, Mutual Funds 34% Home equity loan/line of credit 32% Medicare Part D 30% Auto/Homeowners Insurance 30% Medicare Supplemental Insurance 28% 26% Medicare Advantage Long-Term Care Insurance 26% 26% Annuities Mortgage 24% 23% Health Insurance Life Insurance 16% % Somewhat/Very Likely Reverse Mortgage 12% Product Interested in Buying from their Credit Union Current products – New products

36. StrategyEvolve Into Retiree Companies: A Six Step Program

37. Richard and Linda would take a look Tom and Shari want retirement packages

38. Step 1: Create an Endorsed Retiree Product Portfolio % Somewhat/Very Likely Let them buy

39. 11% Not Effective at All Not Very Effective 30% Total Step 2: Talk Retirement and Never Stop Let them know

40. Richard can’t remember any…

41. Step 3: Build Awareness In Each Channel Insert in monthly statement Send brochure through mail Email, with a link to their website Brochures at the branch Announcement on credit union website Seminar at the credit union local branch An “open house” at the credit union Phone call from my credit union In-Person Internet Advertisement in the newspaper By Mail Credit Union representative at work Phone Advertisement on the radio Create retirement space in ever channel

42. Phone Internet By Mail 58% 38% 21% 10% Loans In-Person Savings 52% 41% 23% 8% Investments 55% 41% 23% 8% Insurance 51% 25% 15% 36% Step 4: Build Retirement Research Centers In Branch and Online In the branch and on the web

43. In-Person Step 5: Build Purchase Channels Phone Internet By Mail Integrate Channels

44. Members want a trusted advisor.

45. Step 6: Make the Credit Union Their Retirement Advisor Financial Planner/Advisor Friends/Relatives The Internet Financial magazines Newspaper articles Accountant/tax preparer Bank advisor/representative My employer Specific financial websites Retirement planning presentations/seminars Books about financial planning Famous advisors Broker Credit Union advisor/ representative TV programs General money management seminars Think of all the ways you can answer their questions

46. Visit us at booth #209 • Meet our Boomer and Gen Y experts • Sign in to get exclusive research on Boomer retirees www.cunamutual.com/marketconnection • Find out how to offer our new Medicare suite to your members