In Focus

The Lutheran Brotherhood

NOTE: All this week in the Chicks' Eye View we will be featuring companies based in the home state of five Chicks -- Minnesota. It's the BIG WEEK of the Chick Fest, which will also be taking place in Minnesota so we thought we'd highlight some home grown businesses. But if you're visiting God's country, beware of the mosquito.

I just can't think about writing about business in Minnesota without including something "Lutheran." Lutheran Brotherhood (LB) is a company which is perhaps a little different from the other companies we have been researching. It is a fraternal benefit society, which I shall try to explain in this article. Its headquarters are located in Minneapolis, MN. , the city in which I grew up. I came from a strong Lutheran background. My father was a Lutheran minister and then a theology professor at a Lutheran college and seminary. I attended that same college, and I have been an active member of Lutheran churches in whatever cities or towns I have lived in. Minneapolis and St. Paul are known as the "Twin Cities," separated for the most part by the Mississippi River. I remember my father telling me as a teenager, "The Scandinavian Lutherans live in Minneapolis, and the Irish Catholics live in St. Paul, so I don't want you going across the river. Do you hear me?" Well, I strayed. I married after college and my husband eventually became a schoolteacher and coach in a St. Paul suburb. So we moved there, raised our family there, joined a Lutheran church there and my father even came to visit me often. He still liked me!

Lutheran Brotherhood is a faith-based, member-owned financial services organization of 1.2 million Lutherans nationwide whose mission is to work together to provide financial security for members and to serve Lutherans, their congregations, institutions and communities. For more than 80 years, Lutherans have turned to LB for financial guidance and innovative solutions.

Lutheran Brotherhood helps its members achieve financial security in the context of faith, values, and finances. It serves the Lutheran community as a resource for financial education, character outreach, and volunteer services. They offer their members a variety of insurance and investment products.

Now, I'd love to be able to discuss only the Minneapolis, MN company that I started this article with -- Lutheran Brotherhood. But there are all those "cheese heads" in the state next door! Wisconsin has a company very similar to LB -- Aid Association for Lutherans (AAL), and the reason I bring this up is that these two companies have just announced (on June 27th) that they will merge and become one. I have been a member of AAL for over 20 years -- simply because the representative from that company got to me first. They were each begun by a different synod of the Lutheran Church. (Lutheran Brotherhood by the ELCA or one of its merged smaller synods and AAL by the Missouri Synod.) This is certainly not important in the long run, but Lutherans like to bicker about the slight differences among the synods.

Anyhow, Bruce Nicholson, the CEO of LB said, "I have identical twin, twenty-five-year-old daughters. I think that LB and AAL are similar to my daughters. You couldn't tell them apart. The fought and competed when they were younger. And now that they are older, they're the best of friends."

When Nicholson became CEO of LB one year ago, he wanted to make some changes in the fraternal organization, which dates back to 1917. He realized that it was inevitable that LB would have to merge with another group to become more competitive in the fast changing financal service world. The Minneapolis based organization provides insurance, mutual funds, and other investment products to 1.2 million Lutheran members. The merged group, with 3 million members and 7100 employees and sales agents and $56.5 billion in assets under management, will be the nation's largest fraternal organization and a powerhouse financial service firm. Take that, St. Paul!

The merger should probably be complete by the year's end. Because AAL and LB were founded for the same reasons and share remarkably similar missions, it is a very compelling business transaction. The new organization's corporate center will be based in Minneapolis and its operations center will be in Appleton.

By merging, the new fraternal benefit society will be positioned to offer even more in asset management, insurance, and financial planning products and services. Both LB and AAL are on the list of Fortune 500 companies. The combined organization will rank among the top financial service providers, but will continue to offer its products consistently with its mission as a fraternal benefit society. A fraternal benefit society is one in which the financial aspects of the organization are only part of the picture. They also offer enhanced programs and services to members through charitable outreach. Examples of this outreach, which both companies offer, are:

1. More than a financial plan, a comprehensive life plan that incorporates your values to build a legacy.

2. Electronic Fund Transfer program that helps your stewardship to Lutheran congregations and institutions take consistent shape.

3. Special feature, which increases the amount to Lutheran institutions you name as beneficiaries of your life insurance.

4. Multiplies your gifts to Lutheran institutions.

5. Increases the value of your volunteer service to your community.

I do definitely agree that there is more to life than just accumulating wealth, so I appreciate some of these innovative solutions offered by these two (soon to be one yet-to-be-named) companies.