For much of the last decade, the yield on cash has been practically nonexistent. As a result, cash was simply not that high a priority for clients or their advisors.
In 2023, it’s a different story. As the Federal Reserve began to raise rates aggressively to fight inflationary pressures, the rates paid on deposits has risen dramatically. With minimal effort, clients could be earning more than 5% on their cash reserves, while keeping their funds FDIC-insured.
How Much Cash Do Clients Hold?
Research from the 2022 Capgemini World Wealth Report shows that HNW U.S. households keep 20% of their net worth in cash. Since advisors often keep a single-digit percentage of client portfolios in cash, the majority of client cash is held away. A $2 million dollar brokerage client might be keeping $450,000 in cash, the vast majority of which sits outside the brokerage account in a brick-and-mortar bank earning next-to-nothing.
After a decade of enduring few good choices for cash, clients need help figuring out where to put the cash they have chosen not to keep in their brokerage accounts. And as this cash comes into view, advisors can help clients identify other asset classes that might provide better returns than cash over time.
Where Should Clients Keep Cash?
Now that rates are over 5%, more advisors will no doubt be helping clients answer the question, “Where should I be keeping my cash?” Today clients often turn to Google, which often leads to visiting an advertising-driven rate comparison site that has incentives to promote a bank that may not offer the best options. And for higher-net-worth clients, a single bank can’t provide sufficient FDIC insurance coverage, nor is there any guarantee that the bank that pays a high yield today will continue to provide competitive yield over time. Fortunately, there’s a way to help clients continuously earn the best yield without advertising or ongoing effort.
Is There a Solution for Advisors and Clients?
MaxMyInterest (or just “Max” as it’s commonly known) is a platform that helps clients open and manage high-yield savings accounts, so they can take advantage of rate changes at banks while staying below the FDIC limits even if they hold large cash balances. Advisors can register for a free client dashboard in 2 minutes at MaxForAdvisors.com, providing access to current rates, client balances, and the ability to help clients enroll in just a few minutes.
Voted as the best cash platform for advisors and their clients according to the T3/Insiders Forum survey for 5 years running, and winner of the “Wealthies” Award from WealthManagement.com, Max is a solution that’s truly differentiated and a WealthTech success story.
With Max, a client’s cash is always safe, fully liquid, and held in their own FDIC-insured bank accounts. Max provides a dashboard and consolidated tax reporting, while clients can receive statements from their banks and contact them directly to access their funds same-day if needed. Max integrates with leading wealth management platforms including Orion, Redtail, Wealthbox, MoneyGuide, and Morningstar ByAllAccounts.
How Do I Get Started as an Advisor?
Visit MaxForAdvisors.com to register for free access to the Max Advisor Dashboard, where you can view client balances and access materials to share with clients. Many advisors also choose to share articles about Max from leading publications such as The Wall Street Journal with clients.
The Max Advisor Dashboard includes a getting started guide, fact sheet that provides up-to-date rate information, and the ability to search support content. Have questions? Advisors can schedule a phone call or request a live demo to find out how they can get started.
Now is the time to help clients start earning more on their cash. Register at MaxForAdvisors.com today to learn more and get started.