Bank Failures Spotlight Cash Management Platforms
by: Jeff Benjamin
The failure of two U.S. banks in less than a week has financial advisors double-checking the potential risk associated with their clients’ cash balances, which is translating into boom times for some cash management platforms. While the federal government has stepped up to varying degrees to backstop investors and the broader banking system, depositors have become keenly focused on Federal Deposit Insurance Corporation insurance following the collapses of Silicon Valley Bank and Signature Bank. “We’ve been getting a ton of phone calls and it’s been pretty crazy,” said Frank Bonanno, managing director at StoneCastle Cash Management. With an estimated $7 trillion worth of uninsured deposits sitting in banks, Bonanno said advisors should see the latest developments in the banking industry as a wake-up call to find out where their wealthier clients are holding cash.
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