With trading fees hitting zero for many brokerage firms, StoneCastle Cash Management is dropping its account minimums on its “FICA For Advisors” cash solution, according to a company announcement. The cash solution offers up to $100 million in federal insurance per tax ID, a product of the firm’s extensive bank network. The firm previously had a minimum of $250,000 to open an account.
The solution is a relatively new offering from StoneCastle, which cut its teeth by providing cash solution services in the institutional arena. Just shy of two years ago it decided to bring cash solutions to registered investment advisors, particularly those serving high- and ultra-high-net-worth clients. StoneCastle is currently working with 400 RIAs, according to Frank Bonanno, managing director at the firm. The cost differential from dropping its minimum to $0 is “de minimis,” he added.
“[Advisors] told us they wanted us to make it easier for more of their clients to use [the cash solution] by lowering the initial deposit, which we are happy to accommodate,” said Kyle McAndrew, head of intermediary sales at the firm, in a statement. “We decided to lower it to zero to make it as accessible to as many advisors and their clients as possible.”
“If advisors are not having the cash conversation with their clients, someone else is having it,” said Bonanno. His firm is not going to compete for advisors’ business, he said, which is a key differentiator from many of the banks that are either in wealth management or looking to expand their wealth management provisions.
“Advisors in general aren’t looking to replace clients’ checking accounts,” he noted. “They are looking to be more comprehensive in their approach with clients and the new minimum helps them do that for clients with, for example, $25K or $50K.”