A new competitor has entered the advisory client cash management market: Altruist Cash.
The new product now available was built by Altruist’s in-house developers, launched in 2019, and leverages several of the company’s existing infrastructures.
“This is intended to be used by advisors as they see fit,” said Adam Grealish, Head of Investments at Altruist. Those advisors who already have assets under custody at Altruist (which will self-liquidate in March 2023) can use it as a fully integrated platform-wide portion at no additional cost.
“If the advisor is only interested in a cash solution, it can work well as a standalone solution,” he said. In this case, Altruist will compete with other independent third-party cash management products offered to advisors and their clients, including Flourish Cash and MaxMyInterest.
For years, customers have been very interested in cash management and high-yield savings accounts (HYSA).
Recent research published by Wealth Management IQ, sponsored by Flourish Cash, found that more than a third of clients inquire about HYSA (Wealth Management IQ is owned by Informa, plc, the parent company of HYSA) Wealth Management Network). The research is based on a survey of 418 advisors who are active Flourish Cash users between August 20 and September 5, 2023.
When talking about holdings, 61% of advisors said they often discuss cash issues with clients, while only 49% said they often discuss insurance issues with clients, and even fewer (21%) often discuss investment issues, according to the survey. Real estate field.
Manuel Martinez, sole owner of Charleston Wealth Advisors, has been using Altruist as a custodian for two years. He said he often answers customers’ questions about where to store cash and is excited to be a beta tester of the new product.
“The first thing I did was open an account for myself, as if I were a customer, I sent an invitation link and it only took a few minutes to set it up,” he said.
“Whenever they have a test program, I look into it,” said Martinez, who praised the user-friendliness of the hosting technology.
Initially, new altruistic cash accounts will pay an annual interest rate of 5.10% on the cash held in the account. As with most other providers’ sweep plans, participating banks may change this rate based on market conditions.
There is no account opening minimum, and Altruist charges no annual or monthly fees for the new cash service; Altruist is compensated by participating banks.
When asked why Altruist decided to build its cash platform in-house rather than partner with an existing third-party vendor, Grealish said the decision was an easy one.
“From a cost-benefit analysis, it makes sense; we’re able to leverage a lot of the existing technology and infrastructure that we already have, such as our local account opening,” he said.
“The other thing I would point out is the flexibility in fees, advisors can choose to charge an administrative fee on cash. Or if they consider it a reduced fee or free service, that’s fine too, our billing infrastructure allows This option is easy to set up,” Grealish said.
