Flourish / Wealth Management IQ Survey Finds Advisors Vastly Underestimate Clients’ Held-Away Cash Holdings

Advisors Acknowledge Responsibility for Cash Advice, with Only 5% Offering Solutions or Discussing it with Clients

New York, March 26, 2024 (GLOBE NEWSWIRE) -- Flourish, a platform that provides innovative access to financial products that help registered investment advisors (RIAs) secure their clients’ financial futures, and Wealth Management IQ (WMIQ), a leader in research services for wealth and asset management communities, today released “Client Cash: Mapping an Unexplored Opportunity,” a survey on advisor perceptions around their clients’ held-away cash and attitudes around cash management needs.

Key findings and insights include:

  • Clients’ cash holdings are vastly underestimated: Surveyed advisors believe their average client holds 7% of their net worth in cash, while high net worth individuals actually hold more than 30% of their net worth in cash.
  • Advisors are ignoring the cash conversation despite knowing its importance: The critical cash conversation is frequently overlooked, highlighting a significant gap between awareness and action in the advisory field with 95% of advisors acknowledging the importance of addressing clients' cash needs as a professional responsibility but only 5% of advisors consistently inquiring about their clients' cash holdings.  
  • Clients want high yield on their cash: 92% of advisors report that their clients have expressed interest in high-yield savings accounts (HYSAs).  
  • Cash management solutions can help advisors be more competitive: A large majority of advisors (71%) believe that offering an in-house cash management solution for their clients would make them more competitive with other advisory firms as well as more competitive with wirehouses (68%) and robo advisors (62%).

“The crucial insight of this survey lies in the significant disparity between the number of advisors recognizing the responsibility to advise on cash and those actually providing solutions or engaging in discussions with clients,” said Max Lane, CEO of Flourish. “70% of surveyed advisors believe their clients would be interested in earning 4% to 5% in an FDIC-insured account. While it may seem irrational for clients to hold substantial sums in cash, the emotional need for liquidity and safety cannot be dismissed. Advisors have the opportunity to improve relationships while helping clients earn more by offering a cash management solution to every client."

Flourish Cash, Flourish’s cash management solution, built explicitly for RIAs, offers clients competitive interest rates and elevated FDIC insurance through its Program Banks. Last year, Flourish Cash’s clientbase grew 161% and clients earned more than $130 million in interest. Currently, Flourish Cash offers 5.00% APY on the first $1 million and 4.5% on the remaining balance as well as FDIC insurance up to $20 million for two-person households through a joint account and two individual accounts. Current interest rates and FDIC coverage can be found at https://www.flourish.com/rates.

“Thanks to higher interest rates, for the first time in a long time, cash management has become an important consideration for fiduciary-minded advisors," said David Armstrong, Director of Editorial Strategy and Operations for the Wealth Management Group, WealthManagement.com. "Providing smart advice on cash can bring more assets under the tent, differentiate the service model, and help optimize the client’s financial outcome.” 

The nationwide survey of hundreds of advisors reflects responses from mostly independent RIAs and was conducted from August 20-September 5, 2023.  Over 750 RIAs managing over $1.5 trillion in combined assets trust Flourish to bring more assets into their orbit. The Flourish platform allows advisors to feature their firm’s branding, obtain visibility into balances, statements, and tax documents—as well as access client-friendly materials, robust and customizable compliance resources, white-glove support, and more. RIAs can also incorporate their clients’ cash holdings into their core technology systems through integrations with major billing, reporting, and CRM providers.

To read the full survey results download “Client Cash: Mapping an Unexplored Opportunity” by visiting: https://info.flourish.com/advisor-perceptions-client-cash-research.  

About Flourish
Flourish builds technology that empowers financial advisors, improves financial lives and retirement outcomes, and delivers new and innovative investment options to advisors. Today, the Flourish platform supports more than $4.5 billion in assets under custody and is used by more than 750 wealth management firms representing more than $1.5 trillion in assets under management. Flourish is wholly-owned by Massachusetts Mutual Life Insurance Company (MassMutual). For more information, visit www.flourish.com

About Wealth Management IQ (WMIQ)
Wealth Management IQ is a dedicated division of Informa Connect that provides research, content creation and marketing services to the wealth and asset management communities.

Forward Looking Statements
This press release may contain forward looking statements that are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied.

A Flourish Cash account is a brokerage account offered by Flourish Financial LLC. Flourish Financial LLC is not a bank.

Check the background of Flourish Financial LLC and its personnel on FINRA's
BrokerCheck.The cash balance in a Flourish Cash account will be swept from the brokerage account to deposit account(s) at one or more third-party banks that have agreed to accept deposits from customers of Flourish Financial LLC (Program Banks). The accounts at Program Banks will pay a variable rate of interest. Flourish Cash currently has a tiered interest rate structure, as set forth in the rate tier summary. Each annual percentage yield (APY) displayed here is effective as of 09/07/2023 and may change at any time. The Flourish Cash interest rate(s) could be lower than the rate that could be earned by opening a deposit account directly with a Program Bank.  The cash balance in a Flourish Cash account that is swept to one or more Program Banks is eligible for FDIC insurance, subject to FDIC rules, including FDIC aggregate insurance coverage limits. FDIC insurance will not be provided until the funds arrive at the Program Bank. Flourish Cash’s current Program Banks can be found here. For additional information regarding FDIC coverage, visit https://fdic.gov/ and https://www.flourish.com/advisors.This feedback may not be representative of the experience of other customers, and is not a guarantee of future performance or success. 


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