Hidden risks in a safe haven
Our perspective
Cash has always played a critical role in a diversified investment portfolio and it is especially vital in times of uncertainty when investors see cash as protection against risk. Despite the importance of cash, advisers can struggle to engage their clients in meaningful conversations around cash management and may not be fully aware of a client’s total cash holdings.
In this whitepaper we explore the types of cash products that you might consider for your clients, look at the place cash plays as part of a portfolio and explore the cash management innovations the Macquarie CMA brings to the industry.
- Why focus on cash?
- Cash investment options
- The risk
Why focus on cash?
Why focus on cash?
In the current environment, levels of household cash are at near-historic levels.
Yet clients can sometimes think cash is “simple” and not something they need advice on. When this happens clients may not tell their adviser about all their cash holdings and that can compromise the adviser’s ability to provide thorough advice – in an increasingly complex cash product environment.
The number of cash investment options is becoming increasingly complex
The number of cash investment options is becoming increasingly complex
Advisers and clients can choose between cash, cash equivalents and cash alternatives.
In a low-rate environment, the search for yield has led to an increase in the number of products available for advisers to choose from. That can make it hard to deeply understand the risk and return factors of every product, and communicate them clearly to clients.
What risk does that cause?
What risk does that cause?
There’s a need to balance liquidity, risk and return in a volatile environment.
But how can advisers actively manage clients’ cash portfolios to get a healthy rate of return, with an acceptable level of risk – all while keeping clients on track to meet their goals?
Additional information
This information has been prepared by Macquarie Bank Limited AFSL and Australian Credit Licence 237502 and does not take into account your objectives, financial situation or needs. Before making any financial investment decision or a decision about whether to acquire a product mentioned on this page, a person should obtain and review the terms and conditions relating to that product and also seek independent financial, legal and taxation advice.