Investment Advisory Services
Investment Advisory Program for Credit Unions
Sponsored by Brick Capital Management, Inc.
Brick Capital Management, Inc. (BCM) is a registered investment advisor offering a fixed-fee, low-cost Investment Advisory Program for Credit Unions. In on-going consultation with management, this non-discretionary service considers the entire balance sheet, overall interest rate risk, liquidity and income needs, and investment regulations.The specific services offered are as follows:
- Provide Non-Discretionary Investment Recommendations
- Develop Investment, ALM/NEV, and Liquidity Management Policies
- Review Asset-Liability Management (ALM) and Historical Key Ratios Reports
- Obtain Multiple Bids/Offers on Securities
- Develop Investment Strategies in an ALM Context: Types of Securities, Laddering, Maturity Distribution, Individual Security Risk, Portfolio Risk, Liquidity Management, Yield Enhancement, Block Size, Sector Analysis, Restructuring & Workouts
The primary function of a Credit Union is to provide loans and savings products for its members. A Credit Union’s investment portfolio acts as a buffer between these two activities, absorbing excess funds when deposits are growing and loan demand is slack, as well as providing liquidity when this process is reversed. Accordingly, managing the investment portfolio is one of management’s most important responsibilities.
To assist management, Brick Capital Management, Inc. (BCM) offers a fixed-fee, investment advisory program to Credit Unions. The Investment Advisory Program for Credit Unions provides many aspects of the investment management process including investment strategies, Liquidity Management, specific investment recommendations, multiple bids and offers on securities, conference calls to discuss Asset-Liability Management (ALM) Reports, Historical Key Ratios, interest rate risk, and market information. Our approach is to manage the investment portfolio in a total balance sheet context.
Credit Unions hire outside professionals to deal with accounting and legal issues. This Program allows management to work directly with experienced investment professionals to address their specific investment needs. Since the investment portfolio often involves a significant portion of a Credit Union’s assets, this professional guidance is one of the main advantages of the Program.
Saves Managerial Time. Managers often receive numerous telephone calls from brokers each day. The Program eliminates this time-consuming process and management can concentrate on serving the members. Buying investments in the most appropriate block size can reduce the cost of investment administration and the managerial burden.
Term of the Agreement
The Advisory Agreement may be canceled with 30 days’ written notice by the Credit Union or BCM. Thus, the Credit Union is not locked into a long-term relationship.
Safety, Soundness, and Compliance
The main focus of the Program is on the overall safety and soundness of the Credit Union coupled with regulatory compliance. The appropriateness of investments is also of paramount importance. Thus, certain types of investments, although legal for Credit Unions, may not be recommended under this Program.
Cost of the Program
The cost of the Program is on a fixed-fee basis. A representative of BCM will quote a fee upon request.