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July 09, 2020 at 02:04 PM
Many advisors don’t discuss cash often enough with their clients and they may be leaving money on the table as a result, according to Gary Zimmerman, CEO and founder of the cash management platform MaxMyInterest.
That may be the case especially during these days of great volatility, when some investors may want to have quick access to cash.
There is a “big opportunity” for advisors to “include cash as part of their discussion when they meet with clients,” he told ThinkAdvisor in a phone interview.
“So often an advisor will talk about equities or they’ll talk about fixed income or they’ll talk about alternative investments — and those are all very important,” he said. “But cash is important too and most advisors don’t have visibility over their clients’ cash because they never thought to talk about it,” he noted.
For instance, a client might have $200,000 of cash in his or her portfolio with an advisor, but that client might actually have $800,000 in cash at another bank that the advisor might not be aware of, he pointed out.
“The very existence of that cash cushion may enable the advisor to have the client take more risk in their core portfolio and thus earn higher returns over time,” he said.
Eyeing More Banks
MaxMyInterest currently supports seven of the leading Federal Deposit Insurance Corp.-insured online banks and Zimmerman expects that number will soon be growing, he said.
More banks “will be announced in the next few months,” according to MaxMyInterest, which is operated by Six Trees Capital, a fintech firm that Zimmerman serves as managing partner of.
