For financial advisers, liquidity must be more than just an amount of cash a client holds. It must also be visible, accessible and positioned to support portfolio decisions when timing matters.

Brett Grant, Head of Product and Customer Experience at AUSIEX, outlines the thinking behind AUSIEX Cash, a new integrated offering designed to make cash management a more seamless part of the trading process for advisers. By acting as a central cash hub within the AUSIEX website, it aims to reduce transfers and administration, improve visibility across client portfolios and help advisers move cash more efficiently when opportunities arise.

Q: Advisers already understand why portfolios hold cash. What is the more useful conversation to have with clients now?

Brett Grant: The starting point for financial advisers is no longer simply how much cash a client should hold. For most advisers, that is already well understood. The more useful question is whether liquidity is usable when it matters.

A client can have cash somewhere in their broad portfolio structure and still face liquidity pressure if that cash is not visible to the adviser, not available for settlement, or not held in the same environment where trading and portfolio decisions are made. In that scenario, the client may have a cash allocation on paper, but the adviser may still be constrained in practice.

That is where the discussion becomes more operational. For advisers managing retirement income, SMSFs, taxable portfolios or model portfolios, the key issue is whether cash is positioned to support the decision at hand.

Q: Why does that distinction matter so much in portfolio implementation?

Brett Grant: Because portfolio outcomes are influenced not only by strategic allocation, but by how effectively that strategy can be implemented under real-world conditions.

If withdrawals are due, pension payments need to be funded, or rebalances need to be executed during a volatile period, the adviser needs cash in the right place at the right time. If liquidity is fragmented across accounts, slow to transfer or manually administered, operational frictions can begin to shape investment outcomes.

That is the real implementation issue. A portfolio may be well constructed in theory, but if the adviser cannot access liquidity efficiently when markets are moving, the operating model can start to dictate the result. For advisers this is where the quality of the liquidity process becomes just as important as the allocation itself.

Q: You describe this as a ‘liquidity implementation gap’. What sits behind that idea?

Brett Grant: The liquidity implementation gap is the gap between holding cash as an allocation and having liquidity that is genuinely usable inside the advice workflow.

It is entirely possible for a client to hold cash and still have limited flexibility at the point a decision needs to be made. That can happen when cash sits outside the main portfolio environment, is not available for settlement, or requires additional manual processes before it can be used.

In volatile markets, that matters. The difference between intended liquidity and usable liquidity can determine whether an adviser has time to make a considered decision or is instead pushed into a transaction they would otherwise prefer to avoid. Forced selling is often framed as a market or behavioural risk. In practice however, it can also be an operating model problem.

Q: Where does this issue show up most clearly in adviser portfolios?

Brett Grant: It tends to show up in situations where timing, sequencing and control matter most.

Retirement portfolios are one obvious example. A client may have the right long-term allocation, but still need a reliable process to fund regular payments without selling growth assets after a drawdown. Self-Managed Super Funds (SMSFs) face a similar issue, particularly where pension obligations, tax considerations and investment management all intersect.

It is also relevant in taxable portfolios. Advisers already understand the tax implications of selling assets. The more practical issue is whether operational constraints reduce their ability to choose when and how those tax consequences arise. Usable liquidity does not guarantee a better tax result, but it can preserve discretion over timing, parcel selection and sequencing.

For larger advice businesses, the challenge is often one of scale. A manual liquidity process may work for one client account. It is much harder to run consistently across many client portfolios or model portfolios without friction creeping in.

Q: What should advisers be reviewing when they assess whether a client’s liquidity settings are fit for purpose?

Brett Grant: Advisers can start by pressure-testing whether liquidity is genuinely usable rather than simply present.

That means asking practical questions such as: 

• Is cash mapped to known client cash flows over the next six to 24 months? 
• Is liquidity held in the same environment where trading and settlement decisions are made? 
• Can pension payments, withdrawals and tax obligations be funded without unplanned asset sales during volatility? 
• Is there a process for replenishing cash after withdrawals, rebalancing or market moves?

It is also worth asking whether strategic cash can be distinguished from residual or incidental cash, whether parcel-selection considerations have been reviewed before assets are sold, and whether transfers, permissions and settlement processes are robust enough to work under time pressure. 

Just as importantly, client reporting should explain why liquidity is being held, so that cash is understood as intentional rather than looking like an uninvested afterthought.

Q: How does integrated cash help close that gap?

Brett Grant: Integrated cash is not the investment thesis in itself. It is the implementation layer that can make liquidity more functional.

If a cash account is connected to the trading platform, liquidity is more likely to be visible when decisions are made and available for the operational tasks advisers need to perform — funding trades, meeting settlement obligations, supporting rebalancing, managing withdrawals and redeploying distributions.

That reduces the distance between investment intent and execution. It makes cash part of the portfolio workflow rather than a balance sitting outside it.

There is also a practice-efficiency benefit. AUSIEX modelling shows advisers conducting 100 trades a month will save just over 8 hours a month through fewer steps in the cash-processing workflow. For advice practices, that means less manual administration, fewer opportunities for cash-movement errors and more time focused on client outcomes.

Q: What is the key message advisers should take from this?

Brett Grant: The cash conversation should move beyond the simple question of whether cash is defensive or a drag on returns.

The more critical issue is whether liquidity has been designed into the operating model. In volatile markets, the value of cash is not simply that it exists. It is that it gives advisers control when control is hardest to maintain.

The issue is not whether clients hold cash. It is whether liquidity is positioned where it can actually do useful work.

The new AUSIEX Cash Account provides advisers and their clients with a secure, integrated and interest-earning cash facility designed to simplify trading and investment management across multiple asset classes – while also supporting everyday banking needs. Get in touch for more information.