Flourish

Letter from Flourish CEO, Max Lane:


Mid-year review


June 29, 2023

Estimated reading time: 4 minutes

 

Dear Advisors,

At Flourish, we’re on a mission to create a future where advisors are at the center of clients’ entire financial lives, no longer restricted to just the portfolio.

Since my letter in January, Flourish has worked to be responsive to client needs in an ever-changing financial landscape. As we approach the halfway point of 2023 and welcome the warmth of summer, I wanted to share how Flourish has helped you and your clients and give a preview of what’s coming next.

Adding value in uncertain times

Amidst the backdrop of record inflation, war in Ukraine, bank uncertainty, debt ceiling brinksmanship, and recession concerns, you have leveraged Flourish Cash1 to offer clients a safe place for their cash and access to one of the highest rates in the country. Your efforts have earned clients a collective total of approximately $34MM in interest YTD all while maximizing FDIC insurance for their reserve cash.2 We are seeing firms of all sizes uncover tens, if not hundreds, of millions in cash reserves sitting outside of their purview. Using Flourish Cash to pull these assets into your orbit is a powerful way to strengthen financial plans and deepen client relationships.

Thanks to your partnership, we’ve been able to deliver tremendous value to your clients. Below are a few data points from Flourish Cash highlighting that value:

graphic-1-2023-midyear-review


The resiliency of the Flourish Cash program

In March, we saw the largest bank failures in the US since the financial crisis of 2008, including Signature Bank, a former Program Bank of Flourish Cash. These events demonstrated:

  • Flourish Cash worked as designed and protected client assets
    Our bank network and risk procedures ensured client assets at Signature Bank were 100% FDIC insured and that clients maintained full access to their funds at all times
  • FDIC insurance is a powerful form of protection for depositors
    Since inception, not a single penny of FDIC-insured money has ever been lost.4 In this most recent period, the FDIC further demonstrated its ability to quickly provide protection to depositors. 

Together, we ensured clients’ hard-earned wealth was protected and accessible in these challenging times. In the coming months, we plan to significantly increase the FDIC insurance coverage in Flourish Cash to deliver even more protection for your wealthiest clients. 

Momentum builds in crypto markets

Despite increased regulatory scrutiny, bitcoin and ether have had tremendous starts to the year with YTD gains at 81% and 52% respectively.5 With the launch of Recurring Buys for Flourish Crypto,6 you and your clients can now seamlessly execute dollar-cost averaging strategies to gradually build positions in this emerging asset class. Taking into account that 83% of millennial millionaires own crypto,7 I believe having an advisor-centric crypto solution is an essential tool to engage your next generation of clients and ensure your firm is well positioned for the future.

Forging ahead 

Looking to the second half of 2023, we plan to meaningfully increase FDIC insurance and deliver competitive rates. Your valuable feedback has helped define our roadmap and we will continue to improve the advisor and end-client experiences to make Flourish Cash the ideal held-away cash management solution for all RIA clients. Your feedback is always welcome, please feel free to reach out anytime. 

Thank you for your partnership, and I wish you all a wonderful summer and a successful second half of 2023.

Max Lane
CEO, Flourish

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Flourish is an online platform through which investors can access financial services and products. The services and products offered through Flourish 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 cryptocurrency custody and execution services for the Flourish Crypto accounts, and Flourish Digital Assets LLC, which is registered in New York as a commodity broker-dealer and provides website and other technology 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 regarding each service and product. If you were introduced or invited to Flourish by a third-party investment adviser or other third party, whose name or logo may be shown above, please be aware that, unless otherwise disclosed to you, they are not affiliated with any Flourish entity. The role of the investment adviser or other firm that invited you to Flourish may vary between different Flourish services and products, as further described in the terms for each service or product. © 2023 Flourish. All rights reserved.

1 A Flourish Cash account is a brokerage account offered by Flourish Financial LLC. Flourish Financial LLC is not a bank. 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 banks that have agreed to accept deposits from customers of Flourish Financial LLC (Program Banks). The accounts at Program Banks will pay a variable rate of interest.

2 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 FDIC aggregate insurance coverage limits. FDIC insurance will not be provided until the funds arrive at the Program Bank. There are currently at least 6 Program Banks available to accept deposits for institutional Flourish Cash accounts (accounts for corporations, partnerships and other legal entities) and at least 6 Program Banks available to accept deposits for personal Flourish Cash accounts (individual, joint and revocable trust 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, institutional customers are eligible for up to $1,500,000 of FDIC insurance and personal customers are eligible for (i) up to $1,500,000 of FDIC insurance for either (A) an individual account or (B) an account for a revocable living trust in which one person is the only grantor, trustee and beneficiary of the trust ("Individual Revocable Trust Account") and (ii) up to $3,000,000 of FDIC insurance for either (A) a joint account with two owners or (B) an account for a revocable living trust in which the same two persons are each the only grantors, trustees and beneficiaries of the trust ("Joint Revocable Trust Account"). 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 (either because a Program Bank is no longer participating in Flourish Cash, because a customer's cash is not eligible to be swept to a Program Bank based on criteria set by the Program Bank (which will be disclosed at account opening), or because a customer opts out of having their cash swept to a particular Program Bank), the amount of FDIC insurance for which the customer would be eligible through Flourish Cash would 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 opting out of having their cash swept to any such Program Bank 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 for cash held in their Flourish Cash account. Further, SIPC protection is not available for any cash held at the Program Banks. Our current Program Banks can be found here. For additional information regarding FDIC coverage, visit https://fdic.gov/. 

3 Flourish Cash currently has a tiered interest rate structure, as set forth in the rate tier summary. We deposit your cash first with one or more of the Program Banks in the tier with the highest interest rate, up to the maximum amount of deposits for that tier, and then continue depositing cash at Program Bank(s) in each successive tier until all cash has been deposited, subject to any Program Bank opt out elections you have made. Each annual percentage yield (APY) displayed here is effective as of 06/01/2023 and may change at any time. The rates of interest paid by the Program Bank(s) to Flourish Cash customers may be lower than the rate that could be earned by you opening a deposit account directly with such bank(s).

4 FDIC. https://www.fdic.gov/consumers/banking/facts/

5 CoinDesk. Year to date percentages as of end of day Wednesday, June 28, 2023. 

6 Flourish Crypto is a cryptocurrency investment account through which investors can trade cryptocurrencies and maintain custody of cryptocurrencies and U.S. dollars. Custody of Flourish Crypto accounts, including all assets in the 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 technology services and support for Flourish Crypto accounts 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 cryptocurrency wallets. If a Flourish Crypto account is closed, the customer's cryptocurrency positions will be liquidated and the customer will receive the U.S. dollar proceeds. Investing in cryptocurrencies involves a high degree of risk, as further described in the risk disclosures section of the Paxos Terms and the Flourish Crypto Terms. Flourish Crypto accounts are separate from Flourish Cash accounts and assets in Flourish Crypto accounts are not eligible for protection by the Securities Investor Protection Corporation (SIPC). 

7 Frank, Robert. “Millennial millionaires plan to add more crypto in 2022, CNBC Millionaire Survey finds.” CNBC. December 16, 2021.