Co-operate or Control? Credit Union Wealth Management in Canada

In November 2016, the chief executive officer of Credit Union Central of Manitoba was reading the report Credit Union Wealth Management Strategic Option Assessment, which he had commissioned several months earlier. He saw the report as the best and potentially last chance to fix a long-standing problem in the Canadian credit union sector, which comprised democratically-controlled, member-owned financial co-operatives that were sometimes referred to as “people’s banks.” Credit unions had been struggling to advance in the wealth management industry and compete effectively against Canada’s “Big Five” banks. The report set out three strategic options that looked promising. However, experience had shown that nothing was simple in the credit union industry, where disagreements were common among opposing groups such as big versus small, rural versus urban, French versus English, and liberal versus conservative credit unions.

This case can be used to offer a unique co-operative perspective in business courses on strategy or mergers and acquisitions at the senior undergraduate or graduate levels. The case helps students understand why Canadian credit unions chose to partner with Quebec’s Desjardins Group on an equal co-operative wealth management company to compete in Canada’s wealth management industry. This choice was made over two other alternatives. The case highlights how a commitment to co-operation, when tied to member benefits, can help cut through the complexities involved in arriving at a strategic decision that satisfies seemingly divergent interests. After working through the case and assignment questions, students will be able to<br><br><ul><li>identify the unique challenges associated with a merger of co-operatively owned organizations in the wealth management field;</li><li>recognize how the co-operative sector will tend to favour strategic choices grounded in co-operation when those choices present clear benefits to members; and</li><li>appreciate the tension between a desire for autonomy and the need to pursue efficiency through scale and collaboration.</li></ul>

• credit unions
• wealth management
• strategic options
• co-operative perspective
• Canadian credit unions
• Desjardins group
• co-operative wealth management
• mergers and acquisitions
• member-owned financial institutions
• people's banks
• big five banks
• co-operation
• member benefits
• merger challenges
• co-operative sector
• autonomy
• efficiency
• collaboration
• strategic decision-making
• divergent interests