Earlier this year, a young woman—let’s call her Anne—lost her father to
illness. Her mother is the executor of his estate and made an appointment with
his financial institution to settle his accounts. Anne, who is more financially
literate than her mom, came along. She was not impressed with the service they
received—or in this case, did not receive. The financial services representative
did not offer Anne’s mother advice or solutions, or even much sympathy. Anne’s
mother has accounts at another financial institution where she is well treated,
so she moved her late husband’s deposits there. As Anne said to Concentra,
“People have been dying since there were people. You’d think financial
institutions would have figured this out by now.”
Settling affairs for the executors and beneficiaries of deceased members is
an important task. It not only requires empathy, compassion, and understanding,
but also requires effective, timely execution. The Estate Effectiveness Survey
is a new study from Concentra Trust to benchmark credit union estate processes
and better understand what can be done to improve the efficiency of credit union
estate operations. This includes decreasing the time to administer deceased
members’ accounts, retaining assets currently lost on death of the member,
attracting consolidated and new assets, and advancing the executor experience.
Using Qualtrics XM survey technology, we emailed credit unions across Canada.
We found consistent themes of underinvestment and lack of focus, even with the
risk of large outflows of funds in the event of member deaths. Our research has
identified ways to improve the effectiveness of estate operations within credit
unions and offers a series of opportunities designed to achieve operational and
Build relationships with the next generation
membership is close to double the national average in the percentage of members
in the 65+ demographic. This means credit unions have the potential to engage
with non-members who will serve as executors and beneficiaries to deceased
member estates, resulting in new membership opportunities. Providing this
younger generation referrals to sophisticated wealth advisors or experienced
retail advisors, with the appropriate investment of estate assets, will build
confidence in them. And by nurturing these relationships today, credit union
advisors will have the opportunity to extend these relationships now, not just
when an estate falls into administration.
Improve efficiency to ensure a positive
- Provide an accurate summary in a timely manner
On average, it can take an executor 12 to 18 months to complete the full
estate administration process—and a lack of specialized skills can contribute to
setbacks. Sixty-five per cent of credit unions manually prepare their estate
summaries, which, due to clerical errors, can potentially further these delays.
As an example, if a credit union takes longer than six months to finalize and
close an estate, they may need to update from manual to automatic summary
generation to avoid data errors. On top of that, 24 per cent don't provide them
at all—which is a concern, since executors need this information for probate and tax
To provide a positive experience, credit unions need to implement corrective
steps to finalize and close member accounts and provide accurate estate
- Establish realistic expectations and provide executors information to
assist in their role
Thirty-one per cent of credit unions do not have service standards for estate
operations and, of those who do, 36 per cent do not explain what they are.
Implementing service standards on timelines will give the executor confidence
that the estate will be handled properly and enhance their experience. Further,
providing an estate information package will give advisors the opportunity to
explain executor's responsibilities with the proper information.
- Use data to drive strategy
Forty-seven per cent of credit unions do not monitor the total annual dollar
value of assets leaving the credit union. Collecting data drives strategy—you
can only close the gaps if you know where they are. Credit unions should
consider implementing automated analytics monitoring, so expert advisors can
retain and onboard client assets, not just view them as assets leaving the
Increase the wealth portfolio
Sixty-one per cent of credit unions do not consistently refer executors to
internal wealth advisors, and 65 per cent do not consistently refer
beneficiaries. Performance targets for estate operations can help retain assets
and channel new assets, all while positioning the credit union as a leader in
Consider whether an estate administration or
closing fee is appropriate
Only 33 per cent of credit unions
apply an estate administration or closing fee. Implementing an estate
administration fee can reduce staffing costs associated with the process.
Train your estate operations staff
When asked about key
challenges, credit unions identified delays in administering the estate,
processing errors, providing incorrect information, providing a poor experience,
and reputational concerns. Proper training of front-line employees handling
estates can mitigate these errors and increase job satisfaction.
Asset retention and consolidation, executor experience, and training
front-line branch staff in handling estates are priorities for credit unions.
With each strategy, it is imperative to define key department roles, invest in
talent development, build long-term relationships with executors, and ensure
employees are more comfortable and have a positive experience handling estates.
Roadmaps for success
If you're interested in identifying opportunities to streamline operations,
develop strategies for asset retention and consolidation, and need help with
staff training, Concentra Trust can provide a current-state assessment and a
future-state design and roadmap for success.
E: Joan McAulay