Higher interest rates and market volatility are good reasons for advisers to take stock of the cash vehicles they use for clients: both to optimise returns and position clients with sufficient liquidity to navigate volatility.

The appropriate cash vehicle for managing investment holdings, particularly in volatile markets, is often different to the typical accounts used for saving or general cash management – such as a term deposit which doesn’t allow quick access to funds, or a cash management account that sits separately from other investments. 

When choosing a cash vehicle for investment portfolios, factors that should be considered by advisers may include not only the obvious considerations such as a competitive interest rate – but also the extent to which it supports seamless trading by reducing the time, cost and risk of transferring funds from one account to another.

Recent events highlight how quickly investors’ appetite for cash can change – and why it’s important to have suitable cash vehicles established beforehand. 

Fund managers raised their cash allocations to 4.3% in March 2026 as the Iran War broke out and private credit concerns weighed on market sentiment, according to Bank of America’s (BoA) influential global fund manager survey.

The sharp jump from 3.4% in February 2026 was the biggest increase in cash holdings since the onset of the COVID pandemic in March 2020. But the trend reversed almost as quickly as a strong US earnings season and possibility of US interest cuts encouraged investors back into the market. According to BoA, fund managers cut their cash levels back to 3.9 per cent in May 2026.

Australian retail investors appeared to take a similar tack with cash Exchange Traded Funds (ETFs) recording their strongest inflows of the year in March 2026, or $325 million, as some quickly took a defensive stance in the market uncertainty, according to Betashares.

“In today’s fast moving markets, it can be important for advisers and their clients to execute buy orders without the unnecessary delay of external bank transfers and, equally, to maintain portfolio liquidity after selling assets,” says Mr. Brett Grant, Head of Product and Customer Experience at AUSIEX.

This capability may become even more important when the government’s proposed changes to the capital gains tax come into effect and investors could require more cash to fund bigger tax liabilities.

“Cash vehicles which are integrated into trading platforms provide this functionality and allow dividends and other distributions to be paid directly into the account – ready to be used or distributed at an adviser’s discretion,” says Mr. Grant.

Less friction, fewer errors

The optimal cash product is just as beneficial as a crisis eases and investors seek to reposition themselves in the market. The rapid recovery of sharemarkets during the pandemic is perhaps the best recent example of how quickly prices can move in such situations – highlighting the case for maintaining readily available cash for new investments.

To put the COVID market recovery into context, the benchmark S&P/ASX 200 Index suffered its largest one-day fall (9.7%) in over 30 years on March 16, 2020. Just a week later it was 35% below the peak it had reached only a month earlier, according to the Reserve Bank of Australia.

Its relatively quick recovery then made headlines as a new generation of equity investors entered the market. The index regained its losses not much more than a year after its collapse, compared to the decade it took to recover from the Global Financial Crisis.

Integrated cash accounts allow advisers to optimise their trading across the changing conditions which now appear to characterise markets, while potentially reducing the compliance and operational risk caused by cash movement errors.

AUSIEX has calculated its new fully integrated cash account can save advisers who conduct 100 trades each month more than eight hours in time. This potential time saving is a direct result of the fewer steps required to process cash for trading – which reduces not just administration but also facilitates faster trades.

“The potential five minutes per trade that can be saved from our integrated cash account can result in a direct productivity uplift for advice practices. This is a real benefit for advice firms as it allows advisers to concentrate on their core focus of managing clients’ affairs,” says Mr. Grant.

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. Get in touch for more information.