Customers’ uninvested cash balances have been a lucrative source of revenue for the wealth management industry. But firms are now facing pressure to boost interest paid on customers’ cash balances, and that may become a “credit negative” for some independent wealth managers, according to a new research note by Moody’s Ratings.
Wealth managers’ legal and regulatory woes—customers have filed lawsuits and regulators are scrutinizing firms’ disclosures—could lead to lower spread-based revenue earned on clients’ uninvested cash…
