Some real examples demonstrating how the value of managing cash effectively is beneficial for both the client and the financial adviser.
A client with £637,000 held in 32 different deposit accounts learned how to structure and utilise their money more effectively.
They placed £400,000 into 7 new deposit accounts, which earned an extra £15,000 interest and invested the balance for greater long term value and security.
A business with £1,500,000 held with Lloyds Bank was informed that they do not qualify for the protection of the Financial Services Compensation Scheme.
Concerned that none of their money was protected if Lloyds Bank collapsed, they worked with their financial adviser and left £500,000 with the Lloyds Bank, the financial adviser then used the Deposit Sense Effective Cash Management system to place another £500,000 with banks and building societies that had better financial reserves than Lloyds Bank (analysis that is only available with the Deposit Sense system) and they invested the remaining £500,000.
In this situation, whilst the value of the £500,000 investment would fluctuate on a daily basis, they would never be in the situation where they would lose it all should the bank collapse.
A house was sold for £380,000 and the client wanted to make sure their money was protected and earning a good rate of interest.
The is a very easy solution to build with the Deposit Sense Effective Cash Management system. They placed £80,000 on Instant Access and built a portfolio with the balance generating over £20,000 interest over the next 12 months.
The money was spilt over 5 different banks and building societies to make sure it was fully protect by the Financial Services Compensation Scheme.
A Firm of Financial Advisers went to a beauty parade with a Regional Accountancy Practice in the South West, with 5 other Financial Services Firms. They were all given 30 minutes to state their case and sell their proposition.
When their turn came to present their business proposition, they focussed solely on the virtues of helping individuals and businesses to manage and protect the value of their cash.
They explained the Risks associated with unmanaged and unprotected cash. How the Risk of inflation can damage the value and how the Risk associated with not being fully protected by the Financial Services Compensation Scheme can lead to a complete loss of capital if the bank or building society collapses.
However, they got the biggest reaction when they explained the best way to manage cash, and then demonstrated the actual value that is available should any individual or business undertake the cash management activity.
They won the Contract!.
Some clients are afraid of their own perception of Risk Versus Reward, and it can be very difficult to change their minds.
A client with £800,000 on deposit, earning very little interest, had continually declined the offer to have dome of his cash invested.
The financial adviser, having taken on board our approach to helping clients manage their cash, went back and shared the opportunity the client had to increase the guaranteed value he was getting on his cash by a significant amount - from £60 to over £12,000 per annum (interest rates were lower then).
His immediate response was, well that's not a lot, I had better invest some of it.
He invested £400,000, and with his remaining £400,000, the interest rate return increased from £60 to over £8,000.
A progressive and forward thinking solicitor, acting as a Power of Attorney, was disillusioned with the interest rate return he was getting on a client's cash deposits.
The financial adviser helped to source and place the money into PoA deposit accounts from a whole of UK selection, generating over £15,000 return.
The financial adviser took a fee for the work undertaken, but more importantly, she now had a relationship with a solicitor that she previously didn't have, with the realistic hope that more referrals would ensue.
The alternative would have been to have done the usual: walk away and tell them you don't help with cash deposits.
Some clients are afraid of their perception of Risk Versus Reward.
Financial Advisers can stimulate this fear when they take zero interest in the client's cash. Quite often, clients feel that they would be encouraged to invest more money if they fully disclosed all of their assets.
Unfortunately, there is no other choice when you have no tools or systems to help you manage a client's cash, which actually makes the job harder to do.
However, with the right tools and the right approach, you can get your clients to fully disclose all of their assets, al of the time.
You will always produce more regulated business as a result of knowing exactly what assets your clients hold.