US Bank has entered into a distribution agreement with StoneCastle Cash Management to provide FICA For Advisors, a federally insured cash solution, to its registered investment advisor (RIA) clients.
The product is designed to maximise yields and provide high levels of FDIC insurance while reducing market, credit and principal risk on clients’ cash balances.
US Bank is the sixth largest custodian in the United States and the first major custodian to offer the position-traded insured cash solution. The US Bank account is seamlessly connected to a network of more than 800 banks, which enables clients to receive USD25 million in federal insurance protection with the ability to insure up to USD100 million per account.
“We’ve seen increased demand for alternative investment options in the short-term fixed income and cash space,” said Alan Markarian, manager of Investment Advisor Services for US Bank. “This product provides a forward-thinking option for our clients that would be difficult for them to replicate on their own. It has a unique risk profile and a yield that clients may find attractive compared to other cash products they may be considering.”
“Our business model has always been to connect institutional and retail investors to banks through innovative deposit and cash management solutions,” says Dan Farrell, chief executive officer of StoneCastle. “Partnering with US Bank is a great privilege and a perfect extension of that message, which we are certain will help them become an even more competitive organisation while contributing to their clients’ business and financial successes.”
Extended FDIC insured products are designed to provide safety and underscore the importance of principal protection on cash holdings. Through a large network of pre-screened banks administered by StoneCastle, US Bank provides an opportunity for its clients to extend FDIC insurance well beyond the USD250,000 threshold normally found on a single deposit.
“The product has a great balance of liquidity, yield, and principal protection. It’s a best in class solution that we’re excited to bring to our client base,” adds Markarian.