With the record-setting bull market for stocks looking more top-heavy by the day, driving more investors and financial advisers toward the sidelines, Mariner Wealth Advisors is hoping to capitalize on the trend with an in-house cash management group.
Of the $31 billion under management by Mariner's 300 financial advisers, an estimated 15% is currently in cash, according to president and chief executive Marty Bicknell.
Unlike the cash sweep accounts that custodians use for short-term and temporary cash allocations, Mariner's cash management group is for "permanent cash that could ultimately be reinvested at some point," Mr. Bicknell said.
Registered investment advisers increasingly are offering access to cash management and even various forms of banking services. For example, earlier this year, Carson Group partnered with financial technology firm Galileo to offer clients accounts that mimic traditional checking and savings accounts.
There is also MaxMyInterest, a cash management optimization platform designed to capture the highest possible FDIC-insured savings rates.
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While client cash is sometimes overlooked or left to the resources offered through brokerage or custodial platform sweep accounts, it can represent a significant business opportunity.
"Right now, the average high-net-worth household has 27% of its assets held in cash or cash equivalents," said Gary Zimmerman, founder and CEO of MaxMyInterest, which has established relationships with 800 wealth management firms since it was launched five years ago.
Mr. Zimmerman, who doesn't view his platform as competing directly with Mariner's new business unit, believes cash management is an easy foothold into growing client wallet share.
"Most advisers only think about the cash sitting in a client's account, but the preponderance of client cash is usually held away," he said. "We found that once clients started using Max, suddenly additional cash started appearing. And for the adviser, the visibility into held-away cash enables them to provide more holistic advice."
Mariner's cash management business, which will serve institutions and high-net-worth clients once it's up and running next week, will be anchored by a seven-member team, the core of which came over from the Bank of Oklahoma's securities business.
"The advent of this group demonstrates our ability to evolve and expand based on the unique needs of the market and our clients," Mr. Bicknell said. "They will target yield, security, liquidity — whatever the individual is trying to accomplish."