The power of integrated fractional investing: A game-changer for credit unions

Traditionally, investing has been perceived as an activity exclusive to those with significant wealth—a world where capital dictates access. However, the emergence of fractional investing is creating opportunities for a broader and more diverse pool of individuals to participate in wealth-building. By allowing investors to purchase smaller portions of shares, fractional investing lowers the financial barriers that have historically kept younger and less affluent individuals out of the market.

For credit unions, this shift is more than just an innovation—it represents a powerful tool to attract and retain their next generation of customers: Gen Z and Millennials. Recent research conducted by Cornerstone Advisors, commissioned by InvestiFi, underscores the enormous potential waiting to be tapped.

The study highlights an interesting insight: over 70% of non-investing zillennials (the bridge between Millennials and Gen Z) have more than $5,000 in savings. Despite holding a solid foundation to begin investing, many young savers lack awareness of how accessible and affordable it can be to get started. As a result, traditional credit unions run the risk of missing out on this burgeoning demographic, which is increasingly drawn toward fintech companies offering seamless and tech-savvy investment platforms.

For younger generations, the allure of fintech is understandable—they see investing simplified, integrated into their daily financial routines, and often coupled with intuitive educational resources. Yet, this doesn't mean the door is closed for traditional credit unions.

Fractional investing addresses two core barriers: affordability and access. This makes it uniquely positioned to meet the demands of this younger demographic while creating opportunities for credit unions to adapt in meaningful ways and reimagine their role in their customers’ financial growth.

By embracing integrated digital investing services with fractional investing at the forefront, credit unions can remain competitive in today’s financial landscape. In doing this, credit unions can invite customers to participate in markets they may have previously deemed out of reach.

As younger customers gravitate toward fintechs for their investment needs, credit unions are facing a challenge to retain deposits. Integrated digital investing that provides solutions directly in customers’ existing banking interfaces brings convenience and eliminates the need for members to turn to external platforms.

Cornerstone research indicates that 35% of gen z and 34% of millennials would be interested in investing directly from their checking accounts through a bank or credit union they already use. by offering investment tools, credit unions can engage these members beyond standard banking services, building trust and long-term loyalty.

Digital investing creates room for tailored services, especially in financial education—helping customers understand investment basics and feel confident entering the market. With smaller initial investments, credit unions can help educate younger customers that investing isn’t just for the wealthy.

Credit unions must embrace fractional investing to evolve into proactive financial partners. The critical question for them is not whether to adopt this innovative approach, but how quickly they can implement it for the benefit of their members and communities.

By partnering with fintech companies to integrate these services, credit unions can attract younger members and maintain their competitive edge, making investing more accessible. This strategy can foster financial confidence and independence within the community, thereby democratizing wealth-building opportunities.

For an in-depth exploration of this strategy, and to discover why your financial institution needs to bring investing services inside, download the full Cornerstone Advisors report here.