2024 New Year letter from Flourish CEO, Max Lane:


Empowering advisors to embrace new frontiers


January 4, 2024

Estimated reading time: 6 minutes

Dear Advisors,

At Flourish, we are on a mission to help advisors strengthen their firms and deepen client relationships by delivering innovative, delightful, RIA-centric solutions that improve their clients’ financial lives.

Since our founding, Flourish has been exclusively focused on serving RIAs because of the tremendous role they play in delivering peace of mind to their clients. When people feel secure and confident in their financial lives, they are free to focus on what truly matters most: family, friends, careers, and passions.

However, we see an opportunity for RIAs to have even greater impact. Our industry has evolved from picking stocks, to full portfolio management, to truly holistic financial planning, which is driving advisors beyond the portfolio. The ability of RIAs to implement advice and execute financial plans currently is often limited to the investment portfolio. Yet, the expectation that advisors will provide solutions for every aspect of their clients’ financial lives and deliver even more value is accelerating. In this lies immense opportunity.

With the right tools, RIAs can expand beyond the portfolio and provide solutions for even more aspects of their clients’ financial lives: banking, crypto, insurance, and more. We believe that RIAs should have answers for all their clients' needs and that clients will increasingly rely on you to deliver even more solutions.

Flourish’s pursuit is to make this vision a reality.

As we begin another year, I want to reflect on 2023 and preview how Flourish will continue to partner with you to provide new ways to serve your clients in 2024 and beyond.

2023 highlights

Thanks to your partnership, 2023 was Flourish’s best year ever. We made continuous improvements to our core products through new features, capabilities, and enhancements, setting the stage for an amazing year. Highlights include:||

Final 2023 data

 

 

Adding value

While we are very proud of the numbers above, we are more proud of the impact these numbers represent. Events in 2023 heightened a sense of uncertainty and volatility: inflation and rate concerns, wars in Gaza and Ukraine, bank failures, debt ceiling brinkmanship, recession concerns, the FTX fiasco, and the beginning of the 2024 election cycle. These events not only made your job as wealth managers more difficult but also more important. Simply put, your clients needed you – in the portfolio and beyond.

To demonstrate how advisors delivered value for clients outside the portfolio, I’ll share a few highlights from the past year. In March, we experienced bank failures for the first time in the U.S. since the Great Recession. This bank turmoil left many high net worth individuals, and small business owners in particular, scrambling to ensure that their reserve cash was protected. By utilizing Flourish Cash, RIAs were able to offer access to elevated levels of FDIC insurance to swiftly ensure the safety of their clients’ cash. In the tempest, you delivered the safe harbor for your clients.

The extra income from higher yield also had a real impact, particularly on business and non-profit accounts. An advisor who works with many non-profit organizations shared two wonderful anecdotes of how Flourish is helping his clients. One nonprofit was able to streamline its treasury operations with Flourish Cash, generating an additional $250,000 in extra income from earned interest. The increased operational efficiency saved time and freed up capacity to focus on the organization’s core mission while the additional cash helped cover the salaries of several staff members. A second client, an independent school, also began using Flourish Cash as its treasury solution and was able to generate income from interest payments to cover tuition for a few more students that year.±

For me, these examples highlight the critical role advisors play in clients’ lives and the tremendous opportunity we – Flourish and you, our RIA partners – have to do more. This is why we at Flourish are proud of and motivated by our mission.

 

The new RIA frontiers

The RIA industry has been undergoing a decades-long shift towards holistic planning and deeper client relationships. Yet significant areas of your clients’ financial lives remain entirely outside the advisory relationship. 

Advisors have the opportunity to expand their influence beyond the portfolio to new RIA frontiers: banking, crypto, insurance, and more. We’re taking RIAs to these new frontiers. 


Cash solutions

The dramatic increase in rates last year highlighted the opportunity cost of advisory clients holding cash savings in a bank account earning nearly 0%. Advisors who provided solutions like Flourish Cash helped clients earn thousands, or tens of thousands, in extra yield while keeping funds protected with expanded FDIC insurance coverage. Clients will come to expect additional banking solutions from their advisors and platforms like Flourish can help you meet those needs.


Crypto solutions

As reflected in the headlines, crypto took a reputational hit in 2023, which, understandably, turned many wealth managers away from this emerging asset class. However, it was another strong year from a return perspective (bitcoin was up over 150% and ethereum up over 80%) and interest in crypto remains strong with around 59% of advisory clients investing in crypto away from their advisor.1 I humbly suggest that many of your clients, and certainly the clients of tomorrow, remain interested in learning more about and potentially investing in digital assets. Crypto remains an RIA frontier worth exploring. As with any investment, crypto is not necessarily a good fit for every client. However, I do believe that every firm should have an advisor-centric crypto solution in its toolkit to help facilitate investments for interested clients and to monitor those investments as part of the overall portfolio and financial plan. Crypto is here to stay and it would be prudent for advisors to have solutions.


Insurance solutions

A final RIA frontier I’ll highlight is insurance. Whether protecting portfolios, income, or wealth, insurance vehicles can deliver valuable guarantees and peace of mind when included as part of a holistic portfolio and financial plan. Yet, insurance continues to be an underutilized tool by RIAs in large part because of its incompatibility with the fee-based, fiduciary RIA model. This has left advisors to direct clients to purchase insurance on their own, refer them to a potential competitor, or avoid the conversation entirely. At Flourish, we believe true fiduciary advisors should have all available tools in their toolkit to create the best outcomes for their clients. We believe insurance is another area of opportunity for RIAs to further add value beyond the portfolio.

The road ahead

In 2024, we will continue to open doors that empower advisors to take on these new frontiers and broaden their impact beyond the portfolio. We are preparing for the launch of a new Flourish product in early Q1 that will expand the advisor toolkit in new ways. In addition, we will continue to enhance our current Flourish products to improve the experience and ease of use for you and your clients through:

  • More integrations and features to help Flourish fit into existing advisor workflows
  • Ways for advisors to more directly benefit from Flourish
  • Enhancements to the end-client experience, tailored to the unique needs of advisory clients

Thank you for being our partners and trusting us to deliver great experiences for your clients. As always, your input heavily influences our views and roadmap. Please reach out to share any feedback on how we could better serve you – I would love to hear from you anytime at ceo@flourish.com.

Wishing you a wonderful, happy, and prosperous 2024,

Max Lane
CEO, Flourish

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Interested in learning more about Flourish Cash?


Flourish is an online platform through which investors can access financial services and products. Flourish’s offerings are provided by different entities and are subject to different terms, investor protections, and risks. Flourish Cash is offered by Flourish Financial LLC, a registered broker-dealer and FINRA member. Flourish Financial LLC is not a bank. Check the background of Flourish Financial LLC and its personnel on FINRA's BrokerCheck. Flourish Crypto is offered by Paxos Trust Company, LLC, a New York limited purpose trust company regulated by the New York Department of Financial Services that provides custody and execution services for the Flourish Crypto accounts, and Flourish Digital Assets LLC, registered in New York as a commodity broker-dealer and provides website and other services and support for Flourish Crypto accounts. Flourish Financial LLC and Flourish Digital Assets LLC are affiliates, but are not affiliates of Paxos. Please review the Legal section of our website, and the disclosures provided with each Flourish service or product, for further information. If you were introduced or invited to Flourish by an investment advisor or other third party, please be aware that, unless otherwise disclosed to you, they are not affiliated with any Flourish entity. The role of the investment advisor or other firm that invited you to Flourish may vary between different Flourish services and products, as further described in your terms of service. © 2024 Flourish. All rights reserved. 

|| Source: Flourish Financial LLC; data as of January 3, 2024. 

† A Flourish Cash account is a brokerage account offered by Flourish Financial LLC, a registered broker-dealer and FINRA member. Flourish Financial LLC is not a bank. Check the background of Flourish Financial LLC and its personnel on FINRA's BrokerCheck. The cash balance in a Flourish Cash account will be swept from the brokerage account to deposit account(s) at one or more third-party Program Banks that have agreed to accept deposits from customers of Flourish Financial LLC. The accounts at Program Banks will pay a variable rate of interest. 

§ Flourish Cash currently has a tiered interest rate structure, as set forth in the rate tier summary. We deposit your cash with one or more of the Program Banks, subject to any Program Bank(s) you have excluded. You will earn the highest rate offered by Flourish up to the maximum deposit amount for each tier. Each annual percentage yield (APY) displayed here is effective as of 12/07/2023 and may change at any time. The Flourish Cash interest rate(s) could be lower than the rate that could be earned by opening a deposit account directly with a Program Bank.

Ω The cash balance in a Flourish Cash account that is swept to one or more Program Banks is eligible for FDIC insurance, subject to FDIC rules, including aggregate insurance coverage limits. FDIC insurance will not be provided until funds arrive at the Program Bank. There are currently at least 16 Program Banks available to accept deposits for business Flourish Cash accounts and personal Flourish Cash accounts, and we are not obligated to allocate customer funds across more than this number of Program Banks if there is a greater number of banks in the program. Customers are generally eligible for FDIC insurance coverage of $250,000 per customer, per Program Bank, for each account ownership category. Thus, business customers are eligible for up to $4,000,000 of FDIC insurance and personal customers are eligible for (i) up to $4,000,000 of FDIC insurance for an individual account or revocable living trust account and (ii) up to $8,000,000 of FDIC insurance for a joint account with two owners or joint revocable living trust(s). The total FDIC coverage for a two-person household is calculated assuming that each household member has an individual account and that both household members share a joint account. If the number of Program Banks decreases for a customer (for instance, because a customer chooses to exclude Program Banks from receiving their deposits), the amount of FDIC insurance through Flourish Cash could be lower. Typically, all of a customer’s deposits at a Program Bank in the same ownership category (including deposits held outside Flourish Cash or held through multiple Flourish Cash accounts with the same ownership category) count toward the FDIC insurance limit for deposits at that Program Bank. Customers are responsible for monitoring whether they maintain deposits at a Program Bank outside of Flourish Cash and should consider choosing to exclude that Program Bank from receiving their deposits to avoid exceeding FDIC insurance limits. Although Flourish Cash is offered through a brokerage account and cash held in brokerage accounts often has the benefit of SIPC protection, until such time as we offer securities products, customers likely will not have the benefit of SIPC protection. SIPC protection is not available for cash held at the Program Banks. Our current Program Banks can be found here. For additional information regarding FDIC coverage, visit https://fdic.gov/.

◊ Flourish Crypto is an investment account through which investors can trade cryptocurrencies and maintain custody of cryptocurrencies and U.S. dollars. Custody of Flourish Crypto accounts and cryptocurrency trading services are provided by Paxos Trust Company, LLC (Paxos) in accordance with the Paxos Terms. Paxos is a New York limited purpose trust company regulated by the New York Department of Financial Services. Website and other services and support for Flourish Crypto are provided by Flourish Digital Assets LLC (Flourish Digital Assets) in accordance with the Flourish Crypto Terms. Flourish Digital Assets is registered in New York as a commodity broker-dealer. Cryptocurrencies held in Flourish Crypto accounts are not currently eligible for in-kind transfer to other custodians or wallets. Investing in cryptocurrencies involves a high degree of risk, as further described in our risk disclosures. Flourish Crypto accounts are separate from Flourish Cash accounts and assets in Flourish Crypto accounts are not eligible for protection by the FDIC or SIPC. 

± This feedback may not be representative of the experience of other customers, and is not a guarantee of future performance or success.

1 Hougan, Matt, Juan Leon, and Todd Rosenbluth. Bitwise Asset Management. "The Bitwise/VettaFi 2023 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets". January 2023.