Wednesday, March 11, 2015

Ukrainian Credit Union and Credential Financial – Opening Possibilities for Our Members

Michael ZienchukMBA, CIM
Manager, Wealth Strategies Group
I always enjoy the opportunity to speak with members of Ukrainian Credit Union Limited (UCU), because I am always surprised at what I can learn about the UCU from those discussions. For instance, recently I was speaking with a long time UCU member who was asking about what options a UCU member has with respect to investing in the market. When I explained that through the relationship UCU has with Credential Financial Services, UCU members can access mutual funds and other securities for their investment account, the member thought that only a select few mutual funds were available through that channel. Well, this opened up my eyes to the misunderstanding that exists among a segment of our membership regarding what UCU investment professionals can provide for clients.

Credential Financial Services
Credential Financial Services is the investment brokerage created by credit unions across Canada to help their members gain access to the wide variety of available securities for investment accounts. Through affiliated companies Credential Securities Inc. and Credential Asset Management, credit union members who open investment accounts through a UCU investment professional can now access a wide variety of securities, including mutual funds from all mutual fund companies, as well as stocks, bonds, Exchange Traded Funds. 

Historically, and for the most part to this day, Canadian legislation restricted credit unions to only serve members within provincial borders, restricting credit unions ability to grow at a nation level. This hampered credit unions ability to grow large enough to be able to support their own independent investment brokerages when their members began requesting investment accounts that would allow them to buy mutual funds, stocks, bonds and other financial securities. What the credit unions across Canada did was to combine their resources together and create on national securities brokerage, Credential Financial Services, to serve as the brokerage for all credit unions in Canada.  Since then another financial brokerage has been formed and now credit unions have two investment brokerages to help them better serve their clients investment needs.

Mutual Funds Offering Wider Choices for Better Performance
The first investment opportunity that Credential provided to credit union members across Canada was the ability to invest in mutual funds. Initially Credential had an agreement with Ethical Funds, and this mutual fund company’s funds were exclusively promoted.  Since then, the relationship between Ethical and Credential changed, and now all mutual funds traded in Canada, from firms such as Dynamic, Sentry, Fidelity, and Trimark, just to name a few, are fully available through the Credential platform. Whether the funds are focused on equities (stocks), bonds or a combination (balanced funds), the full gamut of mutual fund offerings in Canada can be held in a client’s Credential investment account.  As well, mutual funds focused on U.S. and global equities are also available, as are funds that hold high yield bonds, or stocks in specific industries such as precious metals, oil and gas, etc.  Many of these funds have delivered returns between 7.5% to 25.5% and higher in the period from January to September 2013, and clients willing to take on a little more risk can realize improved returns on their investments. Of course, there is no guarantee with mutual funds that every year the returns will be high – there have been periods where returns were negative, but for clients who are patient and allow time to work for them, the returns can be significant. UCU investment professionals are licensed to help clients acquire the appropriate mutual funds when they are creating their personalized investment portfolio.

Stocks and ETFs Add Even More Investment Options
Furthermore, through the Credential Securities platform, clients can also invest in individual stocks listed on the Toronto Stock Exchange such as Bell Canada (BCE), Magna (MG), Rogers Communications (RCI/B), Canadian Pacific Railway (CP), as well as U.S. listed stocks such as Coca-Cola (K), Facebook (FB), Apple (AAPL) and others.  In this way the individual investor can take advantage of holding securities that pay dividends while also having the potential to realize a capital gain as share prices rise.  The UCU investment professional, who is also a registered Credential Securities investment advisor can help in identifying the most appropriate stocks for clients when they decide on how to build a well-balanced investment portfolio.

Individual Self-Directed Investing
The benefits to the credit union member coming from the relationship between UCU and Credential don’t end there, as Credential Financial has an established self-directed investment platform for clients called Credential Direct. This platform is available through the UCU website, and Credential Direct allows individuals investors to set up their own investment accounts through which they can buy and sell individual securities (stocks, bonds, ETFs, as well as mutual funds and GICs) on their own, without the assistance of an investment advisor. For some investors this is appealing as they would like to try their hand at investing on their own, and UCU has the ability to assist members interested in this approach to investing through our website (the Credential Direct link button is on UCU’s website landing page).

As always, UCU tries to make managing finances as easy and convenient as possible for its members. If you have any questions regarding investments through opening an investment account with Credential, our team of investment professionals at Ukrainian Credit Union Limited is always available to help you make the best decision for your specific circumstances.

Michael Zienchuk, MBA, CIM
Investment Advisor, Credential Securities Inc.
Manager, Wealth Strategies Group
Ukrainian Credit Union Limited
416-763-5575 x204

Mutual funds and other securities are offered through Credential Securities Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds and other securities are not insured nor guaranteed, their values change frequently, and past performance may not be repeated. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This article is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any mutual funds and other securities. The views expressed are those of the author and not necessarily those of Credential Securities Inc. Credential Securities Inc. is a Member of the Canadian Investor Protection Fund.

No comments:

Post a Comment