Advisors use data and trust to find clients’ hidden cash

Wealth advisors are combining client relationship work with account-aggregation tools and anonymized data services to identify cash and speculative investments clients keep outside managed accounts. Firms say the approach helps them map assets that do not appear on their custody platforms.

Advisors describe a sequence that often starts with earning a client’s confidence. Chris Keller of Fifth Third Bank’s private bank recalled a client confiding about a poorly performing side investment and saying, “You can never tell her.” Keller described that level of disclosure as a sign of trust and said advisors rarely get full visibility at the outset of a relationship.

At the same time, technology has reduced manual reporting. Where clients once handed paper statements in envelopes, firms now import consolidated reports from aggregation services and use third-party data products to estimate holdings across institutions.

A May poll of 175 financial advisors found 43% place a high priority on learning about held-away assets; a similar share described it as a moderate priority, and 10% said they were not trying to learn about them. When asked about their ability to account for assets at other firms during onboarding, 32% said they definitely could, nearly 60% said they probably could, and 7% said they most likely could not.

Data products from credit and account-data providers are being used to fill gaps. One such service draws on anonymized investing records to estimate liquid assets by household; one advisory firm used that type of product to identify roughly $14 billion of client assets held at competitors.

Cash often escapes notice. Research cited by advisory firms indicates wealthy households hold a substantial share of their wealth in cash and cash equivalents; one study found that share near 24% for surveyed high-net-worth investors. Ben Cruikshank of Flourish said advisors commonly estimate clients keep only 1% to 2% outside custody, but that figure is frequently much higher. He added advisors tend to think first of cash inside brokerage sweep programs and money-market holdings and sometimes do not revisit whether clients opened bank accounts, sold property or received windfalls that increase outside cash balances.

Advisory fee models affect incentives. Many registered investment advisors charge fees based on assets under management and do not earn directly from clients’ bank deposits held off-platform. Clients also often prefer to keep some funds immediately accessible. “They want to be able to touch it,” Cruikshank noted.

New cash-management products aim to give advisors clearer visibility while leaving clients control of their funds. Flourish Cash provides RIA firms with bank-like accounts that offer deposit protection and competitive rates while reporting balances to advisors. The firm reports about $8.5 billion held in those accounts for nearly 60,000 households working with roughly 1,200 advisory firms. Firms say persuading clients to move or share cash details often requires showing simpler reporting or better yields.

Held-away assets also include small, high-risk accounts for speculative bets. Mitch Hamer, founder of Intersecting Wealth in Chicago, described a client who kept a “pushke,” a separate small account used to buy speculative stock picks or crypto that the client did not want recorded on the firm’s ledger. Advisors responding to such disclosures report avoiding judgment and encouraging openness, saying that accepting the client’s choices makes later financial planning conversations easier.

Firms report that a combination of patient relationship building and data-driven tools allows them to revisit cash positions and tracked outside accounts over time. Advisors use aggregation platforms and third-party wealth data to update estimates of held-away assets and to present clients with options for consolidating or managing funds kept outside managed accounts.