Using sweep vs. a money market fund for current account

Overview

Symplany℠ has historically used the custodian's sweep fund to hold any current account funds. However, money markets have recently been offering a higher yield and many advisors have elected to hold current account needs in a money market fund instead of the custodian's sweep fund.

What is "current account?"

Current account encompasses any funds needed to cover short-term withdrawal needs (i.e. whatever the client plan to spend in the next year or so). For example, if you are sending a client $7,500 per month, you might want to set aside $90,000 to cover the next year's worth of withdrawal needs.

Which money market fund is Symplany using for current account?

AFGXX - American Funds US Government MMkt F2

What are the pros & cons of using a money market fund?

The pro of a money market is a higher return; the con is having to set up a systematic withdrawal in advance of the recurring distribution. Setting up a systematic withdrawal only takes a few clicks, but it's an extra step (this step will ensure the account has enough cash available for transfer each month).

How many days in advance of the distribution should I sell AFGXX?

AFGXX should be systematically sold several days (i.e. 4-5 days) in advance of the distribution to accommodate any market holidays and provide sufficient time for trades to settle.

For example, if you have standing instructions to ACH $7,500 to your client every month on the 15th, you would set up a $7,500 systematic sell of AFGXX on the 10th or 11th.

Which one (sweep or the money market fund) is the default option for my accounts?

Going forward, the default is to hold current account in a money market fund. However, if you held current account in sweep prior to 12/05/2023, those accounts still hold current account in sweep.

You can check the status for any of your clients' current accounts here.

How do I switch my default preference?

You can update your default setting on your account preferences page. Changes you make on this page will impact all future accounts that you open.

And what if I need to make a change to an existing account?

When editing a client's plan, go to the General page, click edit on an account and use the checkbox (see below) to indicate whether the account should use sweep for current account or not.

Check out this video for more details on switching current account to be held in a money market fund:

How do I set up a systematic sell of AFGXX in advance of when funds transfer to my client?

<IN PROGRESS>

What if i want to make this change to all of my existing accounts? Is there a faster way?

This can only be done one account at a time. If you would like assistance with this, please contact support@symplany.com

I've never used current account before; how do I set it up for a client?

Click here if you wan to learn how to set up current account to cover a client's short-term spending goals.

For new accounts, the default setting is to hold current account funds in a money market.

You can check the status of any of your clients' current accounts here.