• Rory Bridle

Are your cash reserves being managed appropriately during COVID? 5 questions to consider

Updated: Oct 1

It has been 10+ years since the global financial crisis and although a great deal was learnt from this experience, broader financial service reforms to protect investors and consumers has still been slow at best (as was evidenced by the recent Royal Commission).

COVID19 has led another global economy recession and as illustrated in the diagram above, flattening the coronavirus infection curve with medical containment polices inevitably steepens this recession curve. However, the longer the virus persists, flattening the recession curve will also take longer and become more difficult.

For the foreseeable future, businesses will continue to see increasing financial risks and pressure on liquidity, making cash management vital to the survival of most organisations. This interdependence is an unavoidable trade-off, but also provides organisations with an opportunity to reflect on their current operations.

Are your cash reserves being managed appropriately?

Is your financial services provider delivering the best possible outcomes for your organisation in these turbulent times?

Here are some questions and information to consider:

1. Are you getting the best available returns?

> Do you have full access to the investable universe prescribed by your treasury policy, to ensure your returns are maximised?

> Some financial providers have a limited product range due to special relationships with financial institutions, which can lead to sub-optimal results.

2. Are you receiving independent advice?

> There should be no conflict of interest between financial advice and the recommended product or platform by your provider.

> Any conflicts must be disclosed in writing. This must include details of all fees received on recommended products, including any brokerage and commissions received by financial service providers for distribution of products.

3. Are you getting the best value for money?

> Review and compare your annual service provider fees.

> Beware of fees based on the % of $ value of investments, as this can result in significant fee revenue to the provider when $ values increase, without necessarily any increase in the level of service and performance being provided.

> Always negotiate a fixed fee or cap on fees with your provider to ensure budget certainty.

4. Does your financial service provider hold an appropriate licence?

> Financial service providers, such as investment advisory firms, must be appropriately licensed by the Australian Securities and Investment Commission.

5. Have you received full financial risk disclosures on products?

> Your advisors must provide full disclosure of the financial risks, including potential losses on all investments.

> These risks must be fully understood by your organization before entering into any transactions.

With the uncertainty of COVID and the current economic climate, now is an appropriate time to review and consider your cash management options, and ensure you are protected from unexpected market fluctuations and risks.

Here at Likwidity, we work to ensure the Public and Private Sector receive the best available rates for their Term deposits, in a transparent, easy and auditable manner. To learn more about our automated, cash management platform, read more here >>

Alternatively, if you have queries please do not hesitate to contact me at

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