How the Banking Crisis Spurred Growth at This Silicon Valley RIA

Treasure Financial, one of the few RIAs focused on managing businesses’ idle cash, is on track to reach $1 billion in assets by the end of the year.


Illustration by RIA Intel

In March, as Silicon Valley Bank was failing, Kyle Jax, vice president of operations at LÜK, a payroll company, had a lot of decisions to make.

“Wednesday, nobody was talking about [SVB] even within the founder community in tech,” Jax said. “Thursday, it changed really quickly.”

LÜK needs its cash. It manages the payroll for thousands of contractors for companies, including Clinique and Ford, the talent agency.

At the time, LÜK held about 30 percent of its cash at SVB. Two years earlier, the company transferred much of its cash to Treasure Financial, a Silicon Valley-based RIA that runs a cash management solution. Treasure aims to offer a higher yield than most banks.

As SVB struggled, Jax transferred all of the company’s money to Treasure.

“I wanted to get it all out for obvious reasons,” he said.

Treasure co-founder and chief investment officer Ben Verschuere said LÜK is one of many customers that reached out in the wake of SVB’s collapse.

Between March and April, Verschuere said the company added 75 clients, bringing the total to 200. That’s more than it had signed in the previous six months. Around this time last year, Treasure was bringing on only one to two clients a week. The company is now on track to hit $1 billion in assets by the end year, said the co-founder.

Unlike most of RIAs, Treasure has built a technology platform to manage surplus cash for businesses.

Verschuere likens what it does for smaller businesses to the internal treasury departments large corporations like Apple and Airbnb have built to manage and invest their idle cash.

“We are basically the robo-advisor for businesses,” Verschuere told RIA Intel. Verschuere argues that the platform is an alternative to having cash balances above the maximum $250,000 insured by the Federal Deposit Insurance Corp. The RIA, which uses third-party custodian Apex Clearing, allocates customer cash to Treasury bills, money market funds, and fixed income mutual funds. Treasury bills and fixed income funds can fluctuate in value. Money market funds are not guaranteed by the government. On its website, the company says, “startups should use banks for their day-to-day financial needs, such as deposits, payments, and lending, with two to three months of cash in their primary bank.”

According to Verschuere, the company can offer higher yields than banks depending on the allocation between different funds, which is directed and customized by clients.

But businesses are moving money out of banks, primarily because of fear. According to Cerulli Associates, a research and consulting firm, U.S. investors moved more than $367 billion into U.S.-domiciled money market funds in March. “Nervousness about the stability of the banking system motivated U.S. investors to withdraw deposits from small and mid-sized banks and park it in the relatively safe asset class of money markets,” the consultant wrote in an April report.

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