By: Cynthia Pollard
Credit unions brought in $26.8 billion in non-interest income last year. That sounds like progress until you look at it as a share of the balance sheet, where it has quietly slipped to about 1.13% of assets, which is down from 1.38% five years ago.
The dollars went up, and the dependence on spread income went up faster.
That’s a comfortable place to be when margins are wide. However, it’s a difficult place to be when they are not. Rates move, and when they do, the institutions that spent the wide years diversifying their revenue will look considerably smarter than the ones that spent them enjoying the spread.
Fee Income Isn’t What It Was
For a long time, the traditional answer to revenue diversification was fees. But that answer isn’t as definitive as it once was.
Non-sufficient funds income has been under sustained regulatory and reputational pressure for years, and a meaningful number of credit unions have voluntarily cut those fees on their own. That’s a great call for members, but a real hole in the income statement. Interchange faces its own legislative threat, and interchange has long been the largest single component of what credit unions book as other operating income.
So the categories that used to carry non-interest income are either flat or shrinking, while the pressure to replace them is rising. This is an actual strategic problem in front of most boards, whether or not it’s on their agendas under that phrasing.
Your Members Already Have an Advisor
Here is a number I’d put in front of a board to consider: Consumer research attributed to Kehrer Bielan found only 2 to 3% of credit union members use their credit union for financial advice, while more than 50% say they would prefer to.
This is as much a business problem as it is a service gap for credit unions. Your members are already investing. They’re already paying advisory fees, already holding accounts, already having the single most
consequential financial conversation of their lives (e.g., retirement, an inheritance, the sale of a business) with someone other than you.
That revenue exists today. It’s simply being recognized on somebody else’s income statement.
And the relationship risk runs deeper than the fee. When a member’s investable assets sit with an outside advisor, that advisor becomes the one who sees the whole picture. Members with an investment relationship at their institution hold substantially more in assets there and stay significantly longer. The inverse is just as true, and less often discussed: the member whose wealth lives elsewhere is a member whose loyalty is on loan.
Only about a quarter of credit unions offer investment services at all. For the 76% that don’t, it’s a missed opportunity that should be remedied.
Investment Income Behaves Differently
Investment services revenue is worth understanding on its own terms, because it doesn’t act like the fee-based income it replaces.
Investment income compounds. What I mean by that is, a well-run program builds assets under management, and revenue tied to assets grows as those assets grow through market appreciation, additional deposits and referrals from members who tell other members. Fee income is transactional and resets every month, while advisory revenue accumulates.
It carries a comparatively strong margin once the program reaches scale, because the incremental cost of serving the next member is far lower than the cost of standing the program up.
And it’s counter-cyclical to your core business in a useful way. When rates fall and lending margins compress, members are more actively engaged with their portfolios, not less. The revenue stream that softens is not the same one that strengthens.
That’s the definition of diversification that actually matters.
What This Income Pays For
The strategic argument lands hardest when you attach the income to something specific, like core system conversion, digital platform investment, opening a branch in a growing market, or bringing in lending talent you can’t currently justify. Every one of these competes for the same limited earnings, and every one of them gets funded in one of three ways: retained earnings that are already committed, deferral or member fees.
A mature investment program presents a solid fourth option. It funds strategic priorities with income that members choose to generate, in exchange for a service they wanted, rather than income extracted through pricing changes they didn’t ask for.
For a cooperative, that distinction means everything.
The Board Conversation
If your credit union is heading into a planning cycle under margin pressure, these three questions are worth putting on the table:
- What percentage of our revenue comes from something other than spread, and where has that number been trending for five years?
- How much of our members’ investable wealth is currently held outside this institution, and what are we prepared to do about it?
- If margins compress 50 basis points over the next two years, which revenue line absorbs it?
These questions tend to open the conversational floodgates and often change what the room is willing to consider.
What a Program Looks Like When It Works
Programs succeed or fail on the structural details, like advisor recruiting and retention, the broker-dealer relationship, compliance infrastructure, referral processes that actually function and honest benchmarking against comparable programs rather than against the last year.
That’s the work my team does. GSG structures, grows and benchmarks investment programs for credit unions, and we do it as a credit union-owned CUSO, under the same cooperative framework our clients operate in.
That structure was deliberate. Our founder, president and CEO, R. Scott Jentz, built GSG on the conviction that credit unions shouldn’t have to hand their members’ wealth to an outside firm in order to serve them well. Two decades later, it’s still the premise that every program we manage is built on.
In 2025, GSG’s wealth management division produced more than $18.4 million in combined revenue across our partner portfolio. Bellco Credit Union generated over $10.5 million on $1.5 billion in assets under management; its strongest program year on record. Arizona Financial Credit Union set a new benchmark at $1.497 million. Monterra Credit Union crossed into the million-dollar tier at $1.4 million.
Those are real numbers on real income statements, at credit unions that decided their members’ investment business belonged with them.
If you’re looking at your revenue mix and not liking the concentration, that’s the conversation worth having. Reach out and we’ll walk through what a program at your institution could realistically produce.
Cynthia Pollard is president of investment program management at GSG, a credit union–owned CUSO founded in 2000. With over 35 years as a licensed professional, Pollard leads the wealth management division’s efforts in transforming credit union investment programs into industry leaders. GSG’s credit unions and advisors consistently rank in the top 10% of their peer group.