In today's complex financial landscape, treasury teams are increasingly managing relationships with multiple brokers and financial institutions. While this approach offers benefits in terms of risk diversification and access to specialized services, it also creates challenges in maintaining visibility and optimizing cash positions across these relationships.

This article explores five proven strategies that leading treasury teams are implementing to optimize their cash management across multiple brokers, ensuring they maximize returns while maintaining necessary liquidity.

1. Implement a Unified Visibility Solution

The foundation of effective multi-broker cash management is comprehensive visibility. Without a clear, real-time view of all your cash positions across different institutions, making informed decisions becomes nearly impossible.

Leading treasury teams are implementing specialized treasury management systems that provide a consolidated view of all accounts and positions. These solutions typically connect via APIs to each financial institution, automatically pulling balance and transaction data into a single dashboard.

2. Develop a Tiered Liquidity Structure

Not all cash serves the same purpose in your treasury strategy. By implementing a tiered liquidity structure across your broker relationships, you can optimize returns while ensuring operational needs are met.

This approach allows you to match each broker's strengths with the appropriate tier of your liquidity structure. For example, you might use a global bank for operating cash while leveraging specialized investment firms for your strategic cash.

3. Implement Automated Cash Positioning and Forecasting

Manual cash forecasting across multiple brokers is time-consuming and error-prone. Advanced treasury teams are implementing automated cash positioning and forecasting tools that integrate with their unified visibility solutions.

These tools can automatically analyze historical cash flow patterns, incorporate known future events, and generate accurate forecasts that account for all broker relationships. With this information, treasury teams can make proactive decisions about cash deployment rather than reactive adjustments.

4. Negotiate Relationship-Based Pricing

While maintaining multiple broker relationships provides diversification benefits, it can dilute your negotiating power if not managed strategically. Leading treasury teams are taking a portfolio approach to their financial relationships, negotiating pricing based on their overall relationship rather than account by account.

This approach requires having clear visibility into your total relationship value with each broker, including deposits, investments, and services utilized. Armed with this information, you can negotiate more favorable terms across your entire relationship.

5. Implement Automated Sweeping and Concentration

To minimize idle cash and maximize returns, consider implementing automated sweeping and concentration strategies across your broker network. These can include zero-balance accounts (ZBAs) that automatically transfer excess funds to investment accounts, notional pooling arrangements where possible and automated end-of-day sweeps to higher-yielding overnight investments. The key is to automate these processes so that cash is constantly being optimized without requiring manual intervention from your treasury team.

Conclusion

Optimizing cash management across multiple brokers requires the right combination of technology, strategy, and relationship management. By implementing these five strategies, treasury teams can achieve the benefits of multi-broker relationships while minimizing the associated complexity and inefficiency.

The most successful treasury teams are those that view their broker relationships as a portfolio to be optimized rather than as separate, siloed relationships. With this mindset and the right tools, you can transform your multi-broker strategy from a necessary complexity into a strategic advantage.