The recent explosion of fintech has changed the way businesses manage their cash, and now that same technology is being leveraged to revolutionize cash investing for Registered Investment Advisors [RIAs].
One defining characteristic of RIAs is a fiduciary responsibility to their clients, which means they must act in each investor’s best interest. With this responsibility comes the need to keep cash safe while it is waiting to be deployed, but it’s also essential to keep that cash working. Maintaining this balance of safety, liquidity, and return has always been a challenge for RIAs, but fintech is changing the game.
Insuring Large Sums of Cash with Fintech
A consistent challenge for money managers of all types is maintaining adequate protection for client cash. For those clients nearing retirement or when there is a high probability of a market downturn, it can be especially important to begin moving into “risk-off” investments to combat market fluctuations. This can sometimes result in large cash balances in client accounts. The FDIC provided a solution to this challenge for smaller amounts of cash, up to $250k per account owner at each institution, but what happens when a client has more than $250k?
Historically, there have been several solutions to this problem, but all of them had drawbacks. For example, a firm could maintain relationships with several different FDIC member banks and spread client funds between those institutions to obtain full FDIC coverage. This solution worked to obtain more FDIC protection, but it was labor-intensive and required maintaining many relationships, in addition to the multiple account reconciliations.
Later a few different services emerged to make the process of securing large sums of cash somewhat easier. A few of these became popular, like CDARS and Insured Cash Sweep [ICS], but they too had drawbacks. That’s one reason our company, the American Deposit Management Co. [ADM], developed proprietary fintech that provides a modern solution to this issue.
With an AMMA™ account by ADM, RIAs have access to a cash investment platform that extends FDIC protection to meet the needs of your clients, without the hassle. That’s because our fintech spreads your clients’ cash among our network of community banks. This allows you to provide 100% protection for the cash portion of your clients’ portfolios while enjoying next-day liquidity. This means the days of sacrificing safety for liquidity are over. But, what about return?
The MOST Competitive Return on Cash
The benefits of an AMMA™ account don’t stop with safety. We also leverage the 100’s of community banks in our network to achieve the MOST competitive return available for your clients’ cash investments.
It is no secret that return rates on cash investments can vary dramatically between geographic areas and even from bank to bank. Our platform allows our nationwide network of member banks to compete for your cash, so your clients can access competitive rates without the traditional geographic limitations.
In addition to providing the most competitive rates for liquid cash, an AMMA™ account also provides access to CD laddering strategies and other protected cash investments. These options provide the flexibility that can allow you to improve the return on your clients’ cash with minimal effort. The best part about our service is we are here to enhance your current investing platform, not replace it.
Cash Investments Made Simple with AMMA™ by ADM
At ADM, our team of consultants can work with you to develop a plan that meets the cash investment needs of your firm and your clients. From the moment you submit your application, our team will guide you through the process of opening and managing your AMMA™ account. Then, our convenient online portal ensures you have 24 / 7 access to account information and transfers, and our team is just a phone call away. Our goal is to provide you with access to the MOST safety and the MOST return on your cash investments. Our team is our secret sauce, and you will understand that once you give us a call.
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