The Family Office Sherpa The Burden Of Cash Holdings
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Jul 6, 2025 Explore the complexities of cash management in family offices, where psychological hurdles meet operational challenges. Discover the risks of holding too much cash, especially in low-interest environments, and learn about the importance of strategic alignment with financial needs. Gain insights into optimizing liquidity while enhancing returns and hear tips on fostering clear communication among family members and advisors. Get ready to navigate the intricacies of cash strategies that support both governance and investment goals.
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Cash Can Become A Silent Burden
- Cash provides safety and flexibility but can become a silent weight on a family office operationally and psychologically.
- Large cash piles often form from distributions and uncertainty rather than deliberate strategy.
Why Families Hold Excess Cash
- Families hold meaningful cash for comfort, future obligations, and because they lack a clear liquidity plan.
- The absence of a defined liquidity requirement frequently causes over-accumulation and uncertainty.
Patchwork Accounts Hide True Liquidity
- Cash is often spread across many accounts and relationships with no unified treasury or strategy.
- That patchwork of accounts creates management complexity and obscures true liquidity and yields.