A new competitor has entered the cash management market for advisory clients: Altruist Cash.
The new offering, available now, was built by Altruist's in-house developers, who launched in 2019 and leverages some of the firm's existing infrastructure.
“This is designed to be used as advisers see fit,” said Adam Grealish, head of investments at Altruist. Those advisors who already maintain assets in Altruist, which became self-cleaning in March 2023can use it as a fully integrated part of the entire platform at no additional cost.
“If there are advisers interested in a cash-only solution, it will work well as a stand-alone solution as well,” he said. In that case, Altruist will compete with other independent third-party money management offerings for advisors and their clients, including Flourish Cash and MaxMyInterest.
Cash management and access to high yield savings accounts (HYSAs) are of significant interest to customers and have been for several years.
Research recently published by Wealth Management IQ and sponsored by Flourish Cash found that more than a third of clients had inquired about HYSAs (Wealth Management IQ is owned by Informa, plc, the parent company of WealthManagement.com). The research, based on a survey of 418 advisers, was carried out between 20 August and 5 September 2023.
According to the survey, when it comes to assets kept away, 61% of advisors say they often discuss cash issues with clients, while only 49% report they often have discussions about insurance, and even fewer, 21%, often discuss investments. in real estate.
Manuel Martinez, sole proprietor of Charleston Wealth Advisors, who has used Altruist as a custodian for two years, said he often fields questions from clients about where to keep money and was happy to sign up as a beta tester of the new offering. .
“The first thing I did was open an account for myself as if I were a customer and sent an invitation link and it only took a few minutes to set up,” he said.
“Every time they have a testing program, I look at it,” said Martinez, who praised the ease of use of the caregiver's technology.
Out of the gate, new Altruist Cash accounts are paying 5.10% APY on cash held in the account. As with clearing programs at most other providers, this rate may vary by participating banks based on market conditions.
There are no account opening minimums and Altruist does not charge annual subscription fees or monthly fees for the new cash service; Altruist is compensated by participating banks.
Asked why Altruist decided to build its cash platform in-house instead of partnering with an existing third-party provider, Grealish said the decision was straightforward.
“It just made sense from a cost-benefit analysis; we were able to leverage a lot of the existing technology and infrastructure we already have, for example, opening our domestic account,” he said.
“Another area I would highlight is flexibility in fees, advisers can choose to pay a cash management fee. Or if they think of it as a reduced or no-fee service, that's fine too – our billing infrastructure makes that an easy choice to make,” Grealish said.