Investment options available to Credit Unions (Guest blog)

Share on facebook
Share on email
Share on twitter
Share on linkedin

Credit where credit’s due

While most people will have heard of Credit Unions they remain largely misunderstood. The biggest misunderstanding concerns their members. We know that Credit Unions are used by a range of people with different financial backgrounds and requirements. Those requirements often go beyond service and returns – Credit Unions often embody a sense of community and cater for the specific concerns and needs of the members of its’ community.

Understanding how Credit Unions work is crucial. While banks have customers and focus on maximisation and benchmarks, Credit Unions have members and focus on service, offering affordable lending and generating a reasonable return for those members, and they don’t have typical members – they are for everyone.

In today’s interest rate landscape, banks are faced with the double edged sword of decreasing profit from deposit accounts compounded by an increasingly challenging lending market i.e. lend the capital those deposits represent.  Banks face the same problem as Credit Unions, in that they don’t want to find themselves with too many deposits coupled with fewer opportunities to convert these into a lending book.

So what are the options and how do we work with Credit Unions to get the best return for their members?

We are of the view that Government and Corporate ‘Bonds’ present an investment option for Credit Unions to diversify the way they add value for their members.  Investments like these are not driven purely by current interest rates; liquidity, tax and other factors dictate the return on these investments.  Brown Shipley specialises in this area of investment, not least through our own Sterling Bond Fund, which means we have the depth of knowledge and experience necessary to invest in this asset class.

We design a bespoke solution to meet each Credit Union’s specific needs.  Whether the investment horizon is one year or up to five years; our investment solutions are designed to pay between 1% and 2% in excess of UK base deposit rates based on risk and time horizons.

How does Brown Shipley work with Credit Unions? 

Brown Shipley has a dedicated team who work with Credit Unions every day.  A team backed by a significant investment research department and underpinned by a banking licence with full Bank of England permissions.

Our banking licence makes us different from most investment companies, as we are able to receive deposits from Credit Unions. This means we truly can work directly with Credit Unions and not rely on third parties to deliver our service to you.

Most importantly we will take the time to understand you – what you do, what your members want and what types of investments are appropriate.  When you partner and invest with Brown Shipley, we really do implement the Credit Union’s philosophy of “people helping people.”

Brown Shipley is a UK authorised bank with a strong balance sheet and favourable capital adequacy ratios. We are a member of KBL group of European Private Bankers, which together manage over €48.6 billion (as at December 31st 2015).

Being part of the KBL group means Brown Shipley can offer Credit Unions substantial benefits. The extensive research capacity across the KBL companies means we can identify investment vehicles provided by European banks, something that Credit Unions cannot easily access.

Wealth Well Managed

Credit Unions are not only regulated by the PRA and the FCA, but have to operate within strict investment rules.  We tailor our investment services to ensure they meet those regulatory requirements.


Past performance is not a reliable indicator of future results.  The value of investments and any income from them may fluctuate and is not guaranteed.  Investors may not get back the amount originally invested.

Brown Shipley is a trading name of Brown Shipley & Co Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales No.398426. Registered Office: Founders Court, Lothbury, London, EC2R 7HE.

Brown Shipley’s parent company is KBL European Private Bankers which, from Luxembourg, heads a major European network of private bankers.

Alexander Sloan do not express any views or opinions on guest blogs. Alexander Sloan do not provide a recommendation on any investment, including those mentioned within this article, as we are not authorised to provide investment advice. This article is to give information on one of the options available in the market. Credit Unions are responsible for making their own decisions and assessing the risks and benefits.Alexander Sloan is not authorised under the Financial and Services and Markets Act 2000 but, in certain circumstances, we are able to offer a limited range of investment services because we hold a DPB licence from ICAS. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.