Reflections and the year ahead

Dear advisors,

As we start another year, I’d like to take a moment to reflect on 2022, outline some of the key trends shaping the advisory landscape today, and share how Flourish will help drive advisor success in 2023 and beyond.

Before diving in, I want to introduce myself. I was a founding member of Flourish back in 2017 and assumed the role of CEO in August of last year. As someone who remembers when Flourish was nothing more than scribbles on a whiteboard, it's a tremendous privilege to now lead this firm in serving the RIA community. I believe the combination of trusting relationships coupled with elegant technology is the most effective way to secure more clients’ financial lives and why I am proud of the work we do alongside you, our RIA partners.

I hope the following words give you a better understanding of how Flourish can bring greater value to you and your clients. Thank you for being partners of Flourish and please reach out if there is anything else we can do to better serve you – I would love to hear from you.

Expanding potential through innovation

This past year, Flourish launched new products, features, and capabilities that allow advisors to better serve your clients — solutions that are secure, compliant, and “just work” for the advisor ecosystem. In 2022:

• $15,532,332 earned in interest by Flourish Cash^† clients
• $1.5B+ in total Cash assets under custody
• 9 rate increases with 2022 APY topping out at 4.00%^Ω
  • At the current top rate and with an average household balance of $183,219 for clients with a self-reported net worth of $1-2MM, clients would earn over $7,000 per year in interest
• 142% increase in Flourish Cash client base 
• 500 RIA firms on the Flourish platform, representing a combined $1.5T in AUM
• In Flourish Cash, we added new features including
  • Recurring transfers
  • Enhanced funding capabilities
  • Advisor Resource Center
• In Flourish Crypto,^◊ we added
  • Ethereum support
  • Revocable trust accounts
  • Expanded integrations with Tamarac, Orion, and eMoney
    
    

A shift away from zero interest rates

In 2022, the Fed aggressively raised interest rates to levels not seen since before the Great Recession and projects that rates could exceed 5% this year.¹ This rapid change in monetary policy has had a dramatic impact on equities, fixed income, crypto, debt costs, cash yields, and more. While no one can predict exactly how higher rates will impact your clients’ financial plans, we believe it’s prudent to assume there will be further headwinds in 2023 and beyond.

What can advisors do to ensure their clients are positioned to achieve their financial goals in this “new normal?”

As we exit the era of zero interest rates, it’s my belief that advisor success in 2023 will be less driven by market returns and more by focusing on holistic planning and deeper client relationships. Flourish plans to play a critical role in that journey for our RIA partners. 

Holistic planning, deeper relationships 

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

The majority of your clients maintain substantial banking relationships, stretching from checking and savings to mortgages and loans. Insurance is a pillar of prudent risk management, from life insurance to disability, yet insurance has historically been incompatible with the RIA industry. In recent years, tens of millions of Americans invested in crypto, with financial advisors left sitting on the sidelines. Critically important parts of your clients’ financial lives sit outside the portfolio, held away from you.

It’s difficult to provide truly holistic advice while ensuring clients take actionable steps to meet their financial goals when you don’t have access to products that address client needs. Your job is made even more difficult by the fact that banks, startup trading firms, robo-advisors, lending platforms, crypto exchanges, and more are all attempting to win a portion of your client’s financial lives for themselves by focusing on these gaps.

Our signature products, Flourish Cash and Flourish Crypto, were designed to bring more aspects of your clients’ financial lives into your orbit. 

Given the prospect of challenging market conditions and increased competitive pressures ahead, advisors should seize opportunities to add value outside the portfolio. Ensure that every one of your clients has a high yield cash management solution. Ensure that you are talking to your clients about crypto, recognizing that many of them have already invested outside the advisory relationship and may need help incorporating these assets into their financial plans. 

Flourish and the road ahead

Our mission is to provide advisors with innovative access to financial products so that you can help clients with all aspects of their financial lives, both inside and outside the portfolio. We believe fiduciary advisors will increasingly need to expand beyond investment management and provide both advice and solutions across all aspects of their clients financial lives — from banking to insurance to crypto. Flourish will support advisors in this journey by making financial products accessible to the RIA ecosystem in a way that “just works.”

This mission is why we launched Flourish Cash and Flourish Crypto, and what drives our 2023 product development. We will continue to improve the experience of our existing products and will launch our next major product to help you better serve your clients.
 
In 2023, your clients will need your expertise and guidance more than ever. You play an important role as stewards of your clients’ hard-earned wealth and have what no technology can replace – your clients’ trust. We look forward to partnering with you on the road ahead.
 
Wishing you a healthy, successful, and joyous 2023,

Max Lane
CEO, Flourish