In October 2017, we approached our client The Vaux, a 19-story high-rise condominium in NYC’s Upper West Side. Their $4 million reserve fund was underperforming and not taking advantage of exclusive products available to FirstService Residential clients. Overall, the portfolio was earning just $4,500 annually with an average yield of only 0.12%. They also had a negative unrealized loss in a bond fund position while the cash deposits were earning a meager 0.09%.
After presenting our findings to the Board and earning their trust, the Board agreed to collaborate with FirstService Financial to design a balanced portfolio that protected the assets with FDIC-insured products.
By January 2019, The Vaux had $2.5 million invested in short-term CDs and $1.5 million in a liquid cash position with an average portfolio yield exceeding 2.00%. The annual interest income from their reserve deposits had increased to $72,000, and every dollar was insured.
We strive to help our boards maximize interest income while protecting their reserve funds with deposit insurance to make an impact on their budget and long-term financial success.