Financially Sound for Over 100 Years

The news over the weekend of two bank failures – Silicon Valley Bank (SVB) and Signature Bank in New York – may have you asking several questions. While Baird is not a bank, we wanted to highlight a few points regarding our conservative approach to help ensure the safety of your assets:

Are my assets protected at Baird?

Yes. Clients should have full confidence in the safety of their cash held at Baird. To this end, our clients are protected in a number of important ways.  First and foremost is the long-term success and creditworthiness of Baird – a privately-held, associate-owned global financial services firm. Baird is well capitalized, with net capital well in excess of the regulatory requirement. We use debt conservatively and have significant unused bank commitments. Importantly, Baird has been financially sound for over 100 years.

Certain client assets held at Baird are further protected as summarized here and outlined in more detail on this page.

• Securities in client accounts are segregated from Baird’s assets.
• The Federal Deposit Insurance Corporation (FDIC) covers client funds swept into bank accounts – up to $1.25 million per depositor (or $2.5 million in joint accounts).

How is my cash insured at Baird?

Baird’s Cash Sweep Program places safety as a top priority and is designed to provide FDIC coverage of your cash up to $1.25 million in most account types (or $2.5 million in joint accounts). We achieve these insurance levels by diversifying your cash among several FDIC-insured banks as your cash balance grows with Baird. Our Cash Sweep Program offers you the potential for FDIC coverage greater than if your cash deposits were held only in a single bank. 

If your balance at Baird reaches the maximum FDIC insurance coverage limit, your excess cash will then be automatically placed in a money market fund, invested in government-backed securities.

How will these developments impact the markets?

The Federal Reserve announced the creation of a new Bank Term Funding Program (BTFP) to address SVB and Signature Bank’s closures. The BTFP is offering loans of up to 12 months to US depository institutions pledging qualifying assets as collateral, with the goal of eliminating a bank's need to quickly sell securities at a loss in times of stress. Institutions may obtain liquidity against a wide range of collateral (any collateral currently eligible for purchase in open market operations) during the discount window, which is currently open and available. 

You can be assured we are monitoring the situation very carefully and will be in touch if we feel adjustments to your plan are warranted. If you have any questions, please reach out to our team, or simply reply to this email, and I/we will set up an appointment.