With the recent bank failures, what are advisors telling clients to do about their cash accounts?
An excerpt:
Vance Barse, wealth strategist and founder of Your Dedicated Fiduciary in San Diego, said his phone has been ringing off the hook with clients who have two basic questions.
“Across the board, first they want to know about the solvency of the banking system and whether they need to be pulling money out of banks, and second they want to know what idiosyncratic event happened that put SVB in that position, what the administration’s response was, and whether that was appropriate,” he said, referring to Silicon Valley Bank, one of two banks that were recently taken over by federal authorities.
Barse at Your Dedicated Fiduciary has been recommending laddering Treasuries since the Federal Reserve started raising interest rates early last year. He stacks three-month, six-month, and 12-month notes to allow a degree of flexibility as interest rates change. “So our clients aren’t new to the concept of T-bills,” he said.
But could the bank failures cause the Fed to stop raising rates, or even to lower them? At this point, Barse isn’t necessarily recommending clients move more assets into Treasurys. “That has to be evaluated on a client-by-client basis,” he said.
See Some Advisors Tell Clients To Limit Bank Deposits To $250K Per Bank in Financial Advisor Magazine.