Wealth managers hunt clients’ hidden cash and side bets

Wealth managers are combining relationship-building conversations with account-aggregation tools and cash-management services to identify assets clients keep outside advisory custody. Firms report finding everything from informal savings and bank deposits to speculative crypto positions.

A May survey of 175 financial advisors found 43% rate learning about held-away assets as a high priority. Thirty-two percent said they can definitely account for outside holdings when onboarding new clients, nearly 60% said they probably can, and 7% said they most likely could not.

Firms use automated feeds, integrations between custodians and fintechs, and third-party data services to surface outside balances. A credit reporting agency’s wealth product uses anonymized information from financial institutions to estimate liquid assets by household; one advisory firm using the service identified roughly $14 billion it did not previously see on its books.

Advisors report cash is often underestimated. A global wealth report estimated high-net-worth individuals held about 24% of their wealth in cash and equivalents early this year. Ben Cruikshank, president and chief commercial officer at RIA-support firm Flourish, noted advisors commonly guess clients hold only 1% to 2% of assets in outside cash because they focus on cash inside brokerage accounts and default sweep programs.

Business models affect how closely firms track outside cash. Many registered investment advisors charge fees based on assets under management, so balances held at other banks do not directly increase revenue. Clients also prefer immediate access to funds: Cruikshank said clients “want to be able to touch it.” Flourish offers bank-like accounts with FDIC protections and competitive yields that allow advisors to view client balances while clients retain control; those accounts hold about $8.5 billion for roughly 60,000 households served by about 1,200 advisory firms.

Advisors emphasize repeated, nonjudgmental conversations as a complement to technology. Chris Keller, managing director of Fifth Third Bank’s National Private Bank, recalled a client admitting a poorly performing side investment in private conversation and described that disclosure as evidence of trust earned over time. Keller added that advisors who earn this level of trust often become a client’s primary advisor and recommended avoiding judgment when clients reveal side positions.

Mitch Hamer, founder of Intersecting Wealth, described a client who keeps a small separate account she calls a “pushke” for informal bets on shares or ventures. Hamer requests clients inform him of such activity so he can keep the overall financial plan coherent.

Firms say older practices of collecting paper statements are being replaced by automated aggregation and data mining. Held-away assets include bank deposits, cash swept into money-market or brokerage sweep accounts, private investments and speculative positions. Because firms use different definitions and data sources, there is no single industry-wide total for held-away assets.