Protection Products

The AUM Right Under Your Nose


Most of the advisors we work with manage family wealth. You’re seeing more and more people migrate to this assets under management (AUM) practice – and, why not?! It’s a great business model, and you’re helping people build and manage their personal wealth. 


But I have a question. Are you walking by AUM that is right under your nose? I might be bold in saying this, but you likely are!


The reason is simple. Most practices are managing wealth for individuals and families – many of these folks are business owners. I’ll give you a hint: Are you managing their corporate assets as well? Or, are you letting those assets walk right out of your office? 


Literally BILLIONS of dollars are sitting in the coffers of businesses, earning next to nothing. Law offices, construction firms, farms/ranches, plumbing and heating firms – it doesn’t matter the type of company. Let’s be real. Most businesses have a lot of cash sitting on the sidelines, whether it’s in reserves, being held for bonding requirements, or just sitting in a rainy day, feel-good fund. 


Unfortunately, they are earning 0.0 percent on that cash if it’s in a bank … OK, maybe 10 basis points at the most.  


What are the Banks Doing?

Aside from holding your clients’ business cash for next to nothing, banks are doing something else that’s worth paying attention to … They’re holding assets in Bank-Owned Life Insurance (BOLI). BOLI is simply an institutionally priced life insurance policy for banks’ Tier 1 capital. 

  • As of Dec. 31, 2016, 62.2 percent of banks and savings associations reported holding BOLI assets – that’s up from 60.5 percent in 2015*
  • More surprisingly, when you look at institutions with assets between $1 billion and $10 billion, 82.8 percent of them hold BOLI assets*


Why do they use it? I’ll give you two reasons: 

  • BOLI gives them better yield than other instruments
  • BOLI comes with a death benefit


Are banks smarter than other organizations of that size? Why don’t other businesses use these types of products? Because they do exist!  


At Ash Brokerage, we have three different highly rated companies that offer BOLI-type products for businesses – from “mom and pop” companies up to large corporations. They can take $100,000 deposits, or we’ve participated in placements that have approached eight figures.  


Stop Letting it Walk out the Door

All you have to ask your business owner clients is one thing: 


“Do you routinely have significant cash balances sitting in your company? If you do, I’d like to show ways to put that money to work and use the same instruments that more than 82 percent of the largest banks in the country use.” (Oh, and the yields can be 2.5-3 percent NET of all costs … That’s a lot better than 10 basis points!)


Trust me, you will get a lot of interest if you ask! And when you do, please contact me or one of my team members on the Ash Brokerage Advanced Markets team – we will customize a design for you and your business owner clients.  


Take a closer look at this solution and see the numbers for yourself – join us for a webinar on this topic at 10 a.m. August 28.



For more, watch this 20-minute video with Tim explaining the topic in further detail.

Putting Cash to Work


*2017 Equias Alliance/Michael White BOLI Holdings Report:

Life Insurance Business Owners Cash Value