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How Technology and Client Views Can Simplify Cash Management for Advisors

After a decade of a strong bull market, advisors face the challenge of meeting clients’ expectations while monitoring turbulence in an economic outlook that is trending toward bearish.  Varying consumer views on spending, saving, and budgeting, can complicate client relationships and the way advisors manage their money.  Luckily, continuing innovations in trade management technology and new insights on client relationships help to simplify cash management for advisors. 

The Gap Between Advisor and Client Views on Cash Management

According to a recent report by the Certified Financial Planner Board, advisors and their clients have significantly different views on spending, saving, and budgeting their money. While this offers the opportunity for advisors to further help clients understand their cash flow, it also can cause tension in the client relationship. 

Clients often request that advisors make cash available to them for withdrawal for large purchases. This means advisors must figure out what assets or securities to sell in order to generate that cash. Similarly, if clients regularly deposit cash into their investment accounts, an advisor must figure out how to invest that cash.

The concept seems simple, but this means advisors must be ready to trade at any time depending on cash flow. Advisors must carefully consider the investment objectives, expenses, and risks involved, making it a cumbersome and potentially manual process. 

Clients don’t want to get trapped in the noise and volatility of the market. However, they should understand their cash flow well enough to know how these requests and deposits affect them. Keeping a healthy client relationship and an open line of communication can help clients become more confident about their financial futures. An increased understanding on the clients’ side of the financial plan can also help to simplify cash management for advisors. 

Using Technology to Simplify Cash Management for Advisors

Aside from the gap in client understanding, cash flow management and cash flow analysis is a complex process with a myriad of moving parts. Completing this process manually can be very time consuming, and since it must happen on a daily basis, simplifying cash management for advisors is very important. 

Luckily technology has stepped up to this important task. Trade management solution companies like Blaze Portfolio have developed cash management capabilities to help analyze, monitor, and trade based on the cash requirements of each client.

Simplify with Solutions from Blaze Portfolio

The Blaze system offers several features to help simplify cash management for advisors:

  • Cash Target Rebalances: Rebalance clients’ asset allocation with a specific cash target in mind. This means that if an account needs money for a withdrawal, only overweight positions will be sold and just enough in order to satisfy a withdrawal. If a client needs investment money due to a deposit, only underweight positions will be bought and just enough to ensure that there is no excess cash in the account.
  • Intra-day Cash Accounting: Rebalance client accounts continuously in real-time with inherent intraday cash accounting. There is no need to wait if an account needs to be traded more than once – the system automatically tracks all transactions and changes to cash.
  • Withdraw and Deposit Instantly: Client cash requests and deposits can be instantly logged into the system so that cash can be put to use right away.
  • Specify Long Term Withholdings: Cash minimums and cash withholdings can be specified in a system so if particular clients need an extra cash buffer then this can be accomplished account-by-account. The system will recognize these buffers and ensure that enough cash is held, even if a client account is part of a larger allocation strategy.

For more information on how Blaze Portfolio can simplify your cash management process with real-time cash accounting, cash monitoring, and rebalancing, schedule your free demo of our solutions for investment managers.