The Cash Opportunity for Advisors:

Why advisors are blind to held-away cash

December 8, 2022

Estimated reading time: 5 minutes


With interest rates near historical lows for the past decade, investors and advisors alike could afford to ignore cash. But with rates now climbing to their highest point since 2008, cash has entered the conversation again — creating a significant opportunity for advisors. Over the next few weeks, we’re kicking off  The Cash Opportunity for Advisors, a series of articles that will explore how focusing on cash can help you better serve your clients and grow your business. In the series, we’ll cover what held-away cash is and why clients hold it, how to help clients make the most of their cash, and how a focus on cash can benefit advisors. In this, the first article of the series, we’ll begin by taking a closer look at the cash sitting in your clients’ bank accounts.


Understanding held-away cash

Held-away cash is simply the cash that sits outside a client’s portfolio, outside the purview of advisors. “While it’s often mentioned during the client onboarding process, advisors typically don’t revisit held-away cash in any level of detail with existing clients,” said Flourish President Ben Cruikshank. “Advisors intuitively know that clients keep some amount of cash in a bank account, but rarely take it into consideration when giving advice.”

Many advisors have been comfortable disregarding held-away cash because it wasn’t thought to be a major part of the client’s overall net worth. However, research has shown that cash reserves tend to be significant and that advisors are often in the dark about the scale.


“When we ask advisors how much cash their clients hold, the most frequent answer we hear is 1-2%, by which advisors mean the 1-2% of the portfolio held in cash for purely operational reasons,” said Cruikshank. “However, when you look at the data, it’s clear that high net worth individuals hold significant amounts of cash away from their advisors.”


How much cash do clients actually hold?

According to a 2022 Capgemini World Wealth report, people with at least $1 million in investable assets keep 20% of their net worth in cash.1


Source: Capgemini; data as of January 2022.

“When hearing this data for the first time, many advisors say ‘that may be true of other people’s clients, but certainly not for my clients’” said Cruikshank. “Ironically, many advisors have told us that while simultaneously admitting that they personally hold far too much in cash.”

To further understand how much cash the clients of RIAs actually hold, we took a look at data from Flourish Cash2 customers.

Across 500+ RIAs that represent $1.5T in total end-client AUM and thousands of clients, we can see that households truly do have significant amounts of cash — and balances scale as net worth increases. Clients with a self-reported net worth of $1-2MM hold an average of $183,672 in Flourish Cash accounts3, while clients with a self-reported net worth of $5-10MM hold an average of $363,831 in cash.4 And that’s just the money sitting in Flourish Cash.

So why are advisors blind to held-away cash? Cruikshank explained, “Advisors are great at managing things that sit inside the portfolio, under their visibility and control. Cash is different. Advisors often don't even start the conversation about held-away cash because they can't easily see it, manage it, or bill on it, and don’t have access to advisor-centric cash-management solutions.”


Recognizing the opportunity

Advisors who recognize that clients often hold significant amounts of held-away cash can turn this missed opportunity into an advantage.

Increased visibility into cash can help advisors provide more holistic advice to their clients, from better financial planning to ensuring that clients are taking appropriate risk in their portfolio, to helping clients earn a more competitive rate on their cash. After all, with an average household Flourish Cash account balance of $183,672 for clients with a self-reported net worth of $1-2MM, a client that earns our current rate of 3.75%5 on their cash for a year would earn over $8,000 in interest. For a household with $1.5MM in the portfolio, that would offset almost 60% of average advisory fees.

While future rates are uncertain and there is no guarantee that clients will continue to earn those rates, now could be an optimal time to help clients think strategically about their held-away cash — particularly in a time of economic volatility when clients are looking to their advisor for solutions. And if advisors don’t start the conversation, they should be aware that other firms — from wealth managers at private banks to robo-advisors — may attempt to build a relationship with their clients by presenting them with opportunities for their cash.

The held-away cash that clients have outside the orbit of the advisor deserves a second look. In the next article in this series, we explore the reasons why clients hold cash and how to take this understanding into conversations with your clients about opportunities to maximize the potential of cash.


About Flourish

Flourish builds technology that empowers financial advisors, improves financial lives and retirement outcomes, and delivers new and innovative investment options to advisors. Today, the Flourish platform is used by more than 440 wealth management firms representing more than $1.4 trillion in assets under management. Flourish is wholly-owned by MassMutual. For more information, visit


Interested in learning more about Flourish Cash?

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 (Paxos), 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 (Flourish Digital Assets), 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. © 2022 Flourish. All rights reserved.

1 Capgemini Research Institute for Financial Services Analysis, 2022, Capgemini Global HNWI Insights Survey, Jan 2022.

2 Flourish Cash is a service 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 on FINRA's BrokerCheck.

3 A Flourish Cash account is a brokerage account offered by Flourish Financial LLC. 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. 

4 Source: Flourish Financial LLC; data as of 01/01/2023, average balances calculated with respect to each household's non-zero Flourish account balances across all household accounts. Data corrected on 01/13/2023. 

5 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 11/07/2022 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).