How Flourish Cash compares to other cash instruments

When advisors are first introduced to Flourish Cash,^† they often wonder how it compares to cash and cash equivalents available through their custodians, such as money market funds, Treasurys, and CDs. While these products can all play a role in a well-rounded financial strategy, our experience working with more than 50,000 clients has shown us that virtually every single client has some amount of cash – be it large or small – that they want to remain outside the portfolio.

Clients keep money on the side for a variety of reasons, including paying household bills, saving for home purchases and tax bills, holding emergency savings, or even just to sleep better at night. The question is not if clients have cash they want to keep close at hand, but whether their advisor will support them with the right solution.

“From partnering with more than 1,000 RIAs, we have yet to find a firm that is fully serving every client’s cash needs solely with money market funds,” said Flourish President Ben Cruikshank. “Advisors may leverage cash equivalents to help a fraction of their clients with larger, accommodated cash positions — but when it comes to holistically serving the vast majority of clients, advisors need to look beyond custodial options.”

Flourish Cash helps fill the gap between traditional bank accounts and portfolio cash in two key ways:

It provides clients with a bank-like experience that they control without sacrificing safety, liquidity, or yield
It gives you, their advisor, the ability to assist clients with held-away cash — while gaining greater visibility into what’s held outside the portfolio^∆

When compared side by side, Flourish Cash shares many similarities with common cash instruments at first glance. But from the client’s perspective, the experience of using Flourish Cash feels completely different.

Through conversations with clients and advisors, we've learned that how cash is held matters. A line item on an investment statement simply doesn't feel the same to a client as a dedicated cash account, such as Flourish Cash. As explored in The Cash Opportunity series, cash is deeply emotional for clients, causing them to often hold far more than advisors realize.

Flourish Cash addresses many of the emotional and practical concerns of clients. Here are three key reasons why the client experience stands out:

1. A familiar, bank-like interface

While advisors are laser focused on brokerage accounts, the reality is that virtually every single advisory client already has multiple checking and savings accounts. Unlike cash in the investment portfolio, Flourish Cash is designed to look and feel like the bank accounts clients already use — a familiarity that matters.

“In contrast with other cash instruments, clients often share how much they appreciate the experience of using Flourish Cash in comparison to money market funds and other cash equivalents,” Cruikshank explained. “There’s a reason that high net worth individuals often hold 10-20% of their wealth in bank accounts, despite the cash equivalents offered by their advisor; when it comes to cash, clients are looking for ease-of-use, familiarity, and control.”

2. A fast, simple transfer experience

Moving money in and out of Flourish Cash feels easy because it is. Unlike a money market fund, which requires placing a sell order and waiting for funds to settle, Flourish Cash allows clients to quickly transfer funds directly to and from their bank account, often the very same day.^|

While advisors, who are used to placing sell orders and dealing with settlement timelines, may overlook that difference, the ability to quickly and easily initiate transfers provides tremendous psychological comfort to clients. Clients aren’t selling an investment; they can simply log in and move their own cash.

3. "Advisor's money" vs "My money"

Our conversations have revealed that clients often draw a mental distinction between cash in a brokerage account, which is managed by their advisor, versus cash in their bank. One client referred to her brokerage assets as her “advisor’s money” and the balance in her bank account as “my money.” Even when her bank balance ran low, she resisted transferring funds from her portfolio because she said it “felt different.”

As another client told us: “I don’t want to have to call my advisor to ask for spending money.”^±

This mindset is common. Countless advisors have shared that their clients feel guilty asking for funds to make a small purchase or for requesting a “raise” in their monthly income. Clients trust their advisors, but still want to feel a sense of personal ownership and access to their cash. Advisors frequently encounter this dynamic, with clients “hiding” funds in outside accounts to maintain that feeling of control.

Flourish Cash helps bridge that divide. It provides clients with the liquidity and access they desire while offering advisors visibility and a natural path for future planning conversations as balances grow.

The vast majority of clients hold cash in accounts outside the portfolio, making Flourish Cash a great fit for most advisory clients. While any comparison between products should therefore start with the client experience, there are certainly circumstances where it is important to understand the differences between Flourish Cash and other options.

With Flourish Cash, advisors gain visibility into held-away cash while providing clients with an account that feels like the cash accounts they have always used. Advisors can view client Flourish account balances along with their linked checking and savings accounts.^∆ In addition, you can easily review transactions, interest earned, tax documents, beneficiaries, and more. This expanded visibility helps you give more holistic advice and incorporate real-world cash behavior into your planning.

From the client’s perspective, Flourish Cash offers a familiar client experience to other cash accounts, while offering a competitive rate, same-day liquidity, and increased FDIC insurance coverage through our Program Banks.^Ω In contrast to portfolio cash, your client retains complete control and access of their Flourish Cash account – an important difference to many people.

	Flourish Cash	Money Market Funds	Treasurys	Certificates of Deposit
Product	Brokerage account that participates in a sweep program.	A money market fund (MMF) is a type of mutual fund that invests in debt securities with short maturities and minimal credit risk.	Short-term U.S. government debt securities often purchased in a brokerage account.	A certificate of deposit (CD) is issued by a bank with a fixed interest rate and maturity date.
Rate	Competitive, with rates at 4.00% APY as of 12/19/2024. Rate subject to change.§	Varies, but typically competitive.	Varies, but typically competitive.	Varies, sometimes competitive.
Fees	No platform or Flourish account fees.∫∫	Easy to focus on gross yield and overlook the expense ratio. Once fees are factored in, the net return may be lower than what clients thought they would earn.	No ongoing fees if bought directly. Custodian markups or transaction fees may apply when purchased through brokerages.	No management fees. Will incur early withdrawal penalties that reduce overall returns if funds are accessed before maturity.
Liquidity	Very high liquidity, with same-day wire and ACH transfers.\|	High liquidity; however, advisors or clients have to buy or sell – rather than transfer funds in and out – which can take 1-2 days to settle.	Moderate liquidity. Treasurys can be sold before maturity, but may be subject to market fluctuation and bid-ask spreads.	Low liquidity. Funds are locked until maturity unless the CD is cashed out early, which typically triggers a penalty.
Safety / FDIC coverage	Checking or savings accounts at a standard bank usually offers FDIC coverage up to $250,000. Flourish Cash provides coverage up to $6M for individual and business accounts and up to $12M for joint accounts through our Program Banks.Ω Two-person households with two individual accounts and one joint account can receive up to $24M in coverage.	Not FDIC-insured, but most MMFs predominantly invest in U.S. Treasurys or ultra-safe, short-dated investment company debt, which are highly secure.	Not FDIC-insured but backed by the full faith and credit of the U.S. government.	Can be FDIC-insured up to $250,000 per depositor, per institution, per ownership category. Coverage can be increased by laddering CDs across multiple banks. Brokered CDs and those offered through non-FDIC insured institutions may not receive FDIC coverage.
Advisor role	Full visibility into balances, activity, and linked bank accounts. Integrated into advisor workflows, enabling more holistic planning.∆	If held within the portfolio, advisors have full visibility. May not reflect client's full cash position or near-term goals.	Typically purchased through the custodian. Advisors may include in portfolios or as an accommodated cash position.	Often held outside advisory accounts, so harder to integrate into planning unless part of a managed CD strategy.
Tax implications	Interest is taxed as ordinary income at the client’s marginal rate.	Interest may be taxable or tax-exempt depending on the underlying holdings. MMFs commonly generate ordinary income reported on a 1099-DIV.	Interest is federally taxable but exempt from state and local taxes. May offer tax advantages depending on the client’s state of residence.	Interest is taxed as ordinary income and reported on a 1099-INT annually, even if the CD is held to maturity. No tax deferral.
Volatility	None. Principal is not subject to market fluctuation. Balances remain stable regardless of market conditions.	Very low, but not zero. Account value can fluctuate slightly depending on underlying holdings and market stress.	Prices can fluctuate if sold before maturity, especially in rising-rate environments.	None, if held to maturity. Early withdrawals impact principal due to penalties, not market movements.
Best suited for	Clients who want a high return on their cash with full liquidity and control, in a format that feels like a bank account. Ideal for those who value autonomy but still want holistic planning.	Clients looking for investment-style cash solutions and minor settlement delays.	Clients focused on more traditional options, especially those in high-tax states (for short-term Treasurys). Best for buy-and-hold savers.	Clients who can lock up funds for a set term in exchange for a fixed rate. Best for those who don’t desire the ability to access cash quickly or on short notice.

	Flourish Cash	Money Market Funds	Treasurys	Certificates of Deposit
Product	Brokerage account that participates in a sweep program.	A money market fund (MMF) is a type of mutual fund that invests in debt securities with short maturities and minimal credit risk.	Short-term U.S. government debt securities typically purchased in a brokerage account.	A certificate of deposit (CD) is issued by a bank with a fixed interest rate and maturity date.
Rate	Competitive, with rates at 4.00% APY as of 12/19/2024. Rate subject to change.§	Varies, but typically competitive.	Varies, but typically competitive.	Varies, sometimes competitive.
Fees	No platform or Flourish account fees.∫∫	Easy to focus on gross yield and overlook the expense ratio. Once fees are factored in, the net return may be lower than what clients thought they would earn.	No ongoing fees if bought directly. Custodian markups or transaction fees may apply when purchased through brokerages.	No management fees. Will incur early withdrawal penalties that reduce overall returns if funds are accessed before maturity.
Liquidity	Very high liquidity, with same-day wire and ACH transfers.\|	High liquidity. With an MMF, advisors or clients have to buy or sell – rather than transfer funds in and out – which can take 1-2 days to settle.	Moderate liquidity. Treasurys can be sold before maturity, but may be subject to market fluctuation and bid-ask spreads.	Low liquidity. Funds are locked until maturity unless the CD is cashed out early, which typically triggers a penalty.
Safety / FDIC coverage	Checking or savings accounts at a standard bank usually offers FDIC coverage up to $250,000. Flourish Cash provides coverage up to $6M for individual and business accounts and up to $12M for joint accounts through our Program Banks.Ω Two-person households with two individual accounts and one joint account can receive up to $24M in coverage.	Not FDIC-insured, but most MMFs predominantly invest in U.S. Treasurys or ultra-safe, short-dated investment company debt, which are highly secure.	Not FDIC-insured but backed by the full faith and credit of the U.S. government.	Can be FDIC-insured up to $250,000 per depositor, per institution, per ownership category. Coverage can be increased by laddering CDs across multiple banks. Brokered CDs and those offered through non-FDIC insured institutions may not receive FDIC coverage.
Advisor role	Full visibility into balances, activity, and linked bank accounts. Integrated into advisor workflows, enabling more holistic planning.∆	Limited visibility. Held within the portfolio but often treated passively. May not reflect client's full cash position or near-term goals.	Typically purchased through the custodian. Advisors can include in portfolios, but usage tends to be transactional.	Often held outside advisory accounts, so harder to integrate into planning unless part of a managed CD strategy.
Tax implications	Interest over $10 is reported on a 1099-INT and taxed as ordinary income at the client’s marginal rate.	Interest may be taxable or tax-exempt depending on the underlying holdings. MMFs commonly generate ordinary income reported on a 1099-DIV.	Interest is federally taxable but exempt from state and local taxes. May offer tax advantages depending on the client’s state of residence.	Interest is taxed as ordinary income and reported on a 1099-INT annually, even if the CD is held to maturity. No tax deferral.
Volatility	None. Principal is not subject to market fluctuation. Balances remain stable regardless of market conditions.	Very low, but not zero. Account value can fluctuate slightly depending on underlying holdings and market stress.	Prices can fluctuate if sold before maturity, especially in rising-rate environments. Held to maturity, they're stable.	None, if held to maturity. Early withdrawals impact principal due to penalties, not market movements.
Best suited for	Clients who want a high return on their cash with full liquidity and control, in a format that feels like a bank account. Ideal for those who value autonomy but still want holistic planning.	Clients looking for investment-style cash solutions and minor settlement delays.	Clients focused on more traditional options, especially those in high-tax states (for short-term Treasurys). Best for buy-and-hold savers.	Clients who can lock up funds for a set term in exchange for a fixed rate. Best for those who don’t desire the ability to access cash quickly or on short notice.

Even though advisors have access to money market funds or other cash instruments, clients still tend to hold large amounts of cash elsewhere. Flourish data illustrates that even advisory clients hold a significant amount of cash: households with $1-2M in self-reported net worth have an average balance of nearly $218,000 in their Flourish Cash accounts.^|| Without a tool like Flourish, that money historically would sit outside the advisor’s view, uninvested and unaddressed.

“The reality is that advisors have access to a wide range of cash options at their custodian — and clients still keep a tremendous amount of cash on the sidelines,” Cruikshank explained. “If custodial cash instruments fully addressed client needs, firms would manage significant cash positions for the vast majority of clients. In practice, we rarely encounter firms that hold accommodated cash positions for more than a small fraction of their clients, meaning they are not addressing the needs of most of their clients.”

Advisors who work with Flourish are equipped to take a more proactive approach to this emotionally-charged asset. Instead of being left out of the cash conversation, they gain visibility, strengthen trust, and help clients put reserve cash to better use — earning more while ensuring their funds have elevated FDIC coverage.

Flourish gave us a good excuse to start talking about cash. One of the benefits was that we unearthed assets that we didn't know about.

— Shane Cummings, Halbert Hargrove Director of Technology and Cybersecurity and Wealth Advisor, Halbert Hargrove Case Study

Any tool that lets us get more insight into the client's actual asset allocation is really important to our planning team and our portfolio managers. When you get a tool like Flourish, you can quickly find out about cash holdings you were unaware of before. It helps with providing better asset allocation going forward – and the potential for better service.

— Clifford Haugen, BLBB Principal, President, and Financial Advisor, BLBB Case Study

With Flourish, I can see a client’s linked bank account balances, so I'm able to keep an eye on things. It allows me to easily offer something helpful to clients without spending too much time.

— JoAnn May, CFP and co-founder Forest Asset Management, Advisor Spotlight

Clients want to see their money in a separate account. They don't want to see it piled into a managed account…With their held-away cash, they want to be the ones in charge of it.

— Brian Spinelli, Halbert Hargrove Chief Investment Officer, Cash Awakening webinar

When clients have cash on the side for security, we want to put that cash to work for them. And if you don't have an approachable way to have that conversation, they're just going to have it off to the side and not tell you about it. And that's money that's just not working for them.

— Kristi de Grys, Managing Director Investments, Focus Partners Wealth (formerly Chief Operating Officer/Chief Investment Officer, Merriman Wealth Management), Cash Awakening webinar

How Flourish Cash compares to other cash instruments

1. A familiar, bank-like interface

2. A fast, simple transfer experience

3. "Advisor's money" vs "My money"

Related posts:

The Cash Opportunity

Why cash is more than a number

Same-day transfers

Interested in learning more about Flourish Cash?