The Argument for Independence

In light of the difficult credit market of late and the recent emergence of a small yet hopeful glow at the end of the tunnel, this month we wanted to cover a topic that can help with a question that may be on the mind of many corporate treasurers: How do we get back on track?

Over the course of the past nine months, investors’ sense of security and trust may have been battered by the implosion of auction rate securities, CDOs and SIVs as well as the bail out of several money funds. So, needless to say, many corporate treasurers may now be reassessing their options with respect to how to best manage their cash balances.

Prior to this credit debacle, many corporate treasurers were under the assumption that there were plenty of safe havens for stowing their cash. From money funds to brokerage/bank accounts to investment advisory accounts, all options were generally considered highly trusted and it was assumed that cash balances would most assuredly be handled with steadfast care by all. Therefore, the ultimate destination for corporate cash sometimes depended more on personal relationships than the actual structure of the professional arrangement. However, following the tribulations of the past year, it’s become abundantly clear that the decision of who oversees corporate cash is not one to be taken lightly.

The good news is that you do still have options; although, some of them may have lost their luster, so to speak. This month we plan to focus specifically on the differing structures and regulatory requirements that govern both investment advisors and broker/dealers. We believe the differences between these options can significantly affect the cash investment objectives sought by all corporate treasurers.

Best Regards,

Ben Campbell
President & CEO