Investor Cash Management: A Visa Portfolio Company
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Investor Cash Management: A Visa Portfolio Company Promoting financial inclusion and empowering our partners to compete for $17 trillion in bank deposits with a unique, objectively better product. June 2021 This document and all of the information contained herein constitutes confidential information of Investor Cash Management Holdings Inc (“ICMH”). The information contained herein is intended only for the recipient and may not be reproduced, published, or redistributed, in whole or in part, without the prior written consent of ICMH.
ICM BOARD & CLIENTS
ICM NAMED AMONG THE COUNTRY’S LEADING FINTECH COMPANIES BY VISA, BNY MELLON, MORNINGSTAR, ENVESTNET, AND EXIM BANK.
BOARD:
• Joe Mansueto – Founder/Chairman of Morningstar.
• Lance Weaver – Former Executive Vice-Chairman of MBNA and former Chairman of Mastercard.
• John Rogers – Founder/Chairman of Ariel Investments.
• Fred Phillips – Founder/CEO of Investor Cash Management (ICM).
• Tolan Steele – Visa Global Head of Core Products (observer).
ICM CURRENT PARTNERS INCLUDE:
• PIMCO – a global asset manager with $2.22+ trillion in assets.
• Invesco – a global asset manager with $1.35+ trillion in assets.
• WisdomTree – an international asset manager with $70+ billion in assets.
• National Education Association (NEA) – 3.2+ million “educators and allies advancing justice and excellence in public education.”
• Service Employees International Union (SEIU) – 2.2+ million frontline workers “united by the belief in the dignity and worth of workers and the services they provide.”
• Delaware State University – founded in 1891, DSU enjoys a long history as a leading HBCU and now offers 44 undergraduate degree programs and 23 graduate programs.
• Cabana – a wealth management firm that is an affiliate of CI Financial (a Canadian-based financial conglomerate with US wealth management holdings of $60+ billion).
• Foundations Investments Advisors – a wealth management firm with $1.6 billion in client assets.
• Inspire – world’s largest faith-based ETF asset manager and a US-based wealth management firm.
2
ICM PRODUCT
ICM’s proprietary, unique technology transforms securities (government money market funds, mutual funds, and ETFs) into immediately liquid digital currencies:
our technology enables SEC-registered investment products to be used for payments.
• ICM Cash Management Accounts (CMAs) link concurrently to a high-yield FDIC account and specified securities (e.g., ultrashort and short bond funds).
• ICM is not direct to client: our distribution partners (e.g., asset managers, financial advisors, insurance companies, corporates, and nonprofit organizations) offer CMAs
to their current and prospective clients, employees, and members.
• ICM provides distribution partners with customized CMA products, including a branded Apple/Android app, web portal, and Visa contactless debit card (or, if the
partner prefers, we can integrate our CMA platform into its product construct and app).
The CMA operates like a conventional bank account – but provides an objectively better, unique combination of instant access to funds and higher investment returns.
• The client funds his ICM account via direct deposit, wire, or ACH transfer; as specified by the client, funds are then swept into the FDIC and/or investment subaccounts.
• The client transacts out of his account via the debit card, ATM, online bill pay, or P2P transfers.
The CMA targets an enormous market – retail cash deposits that provide no/low interest rates.
• Current cash deposits in U.S. banks now exceed $17 trillion.
• Although cash deposits are growing rapidly, interest rates remain near historic lows.
There are two use cases: the CMA can complement or replace the current bank account.
• For wealthier clients, the CMA provides far higher rates than conventional savings accounts and brokerage sweep programs.
• For less affluent clients, the CMA is a free alternative to traditional bank accounts (and the unbanked can enroll via direct deposit).
The choice is clear: individuals can keep their money in bank accounts and earn 3 bps, or they can move their money into CMAs and earn substantially higher returns
while retaining instant liquidity and convenience.
3
ICM PURPOSE
ICM promotes financial wellness and inclusion, specifically by converting individuals into investors and empowering them to achieve their financial goals.
• In collaboration with Visa and our asset manager partners, ICM provides clients with financial education materials to better manage their assets and create wealth for
themselves and their families.
ICM eliminates traditional barriers – high transaction costs, confusing choices, and illiquidity – to democratize investment.
• ICM is an active force in narrowing persistent, pernicious racial and gender investment gaps: at no cost, every CMA client has automatic access to investment products.
• The CMA appeals to clients across the socioeconomic spectrum: everyone prefers to earn higher returns.
ICM empowers our distribution partners to enhance client engagement.
• Through the customized, branded app and debit card, our partner becomes a permanent presence in the client’s wallet and smartphone, noting the average
contactless debit card is used 28 times per month and the financial app consulted daily.
• The CMA places our partner at the center of the client’s finances: payments, banking, and investments.
ICM CMAs tap into a massive, rapidly growing sector.
• Debit cards are the preferred payment method among all age groups, and 103.9 million retail investors – almost half of all US adults – now own investment funds: the
CMA is at the intersection of payments and investments.
• The CMA has broad appeal as mobile banking is now the primary method of account access, displacing traditional bank branches: 76% of Americans bank via mobile
app.
4CMA STRUCTURE
ATM Network
Plaid
(Authentication)
3. The CMA client funds are swept
from FDIC-insured bank to broker-
dealer to buy specified securities
Visa linked to CMA. FDIC Sweep
2. The CMA client funds
account at FDIC-insured
bank via direct deposit, wire,
and/or ACH. Distribution
FDIC Issuing Partner Ultra Short
Broker-dealer
Bank Bond Fund
iOS/Android Mobile App
and Web portal
1. The CMA client onboards via 4. The CMA client transacts via
customized branded Apple/Android investment debit card, ATM, P2P Short Bond
app or desktop portal, creating FDIC- transfer, and/or online bill pay. The
insured bank account and brokerage Fund
CMA client funds at all times are at
account. FDIC-insured bank and/or broker-
dealer. ICM never has possession of
5. CMA client funds are sold and
CMA client funds.
proceeds swept from broker-dealer
to FDIC-insured bank for payment
into VISA settlement network.
5CMA PROGRAMS INCLUDE TURNKEY APPLE/ANDROID APPS
6TRANSFORMING INDIVIDUALS INTO INVESTORS
WHILE PROVIDING IMMEDIATE LIQUIDTY ON ALL ASSETS
FDIC
• Core transaction account (1-3 months).
High • FDIC insured and no risk of loss.
Yield • Rate substantially higher than FDIC national
Account average.
Ultrashort • Short-term savings (3-12 months).
ASSET Bond • Offers the potential for increased yield relative to money
MANAGER Funds market funds, with comparatively low sensitivity to
interest rates.
Short • Long-term savings (12+ months).
Bond • Offers the potential for greater yields over time for those
Funds with longer investment horizons.
7BOND FUNDS HAVE VOLATILITY AND RISK OF LOSS,
BUT OVER TIME CLIENTS ARE RICHLY REWARDING
12.00%
• Securities such as 10.00%
ultrashort (USBF) and
short (SBF) bond funds
8.00%
provide substantially
greater returns over time.
6.00%
• The average USBF and SBF
returns have
4.00%
outperformed FDIC
returns over the last 10
years by 28X and 52X. 2.00%
• The ICM CMA is the only 0.00%
product that provides
Dec 16th, 2008 - Dec 16th 2015
instant liquidity on - Fed Funds Range 0-0.25%
investment holdings (and -2.00%
FDIC accounts).
-4.00%
• FDIC accounts do not keep 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1
2021
pace with inflation. Avg. USBF Total Return 4.46% 6.78% 5.62% 2.79% 1.69% 1.40% 2.52% 4.45% 3.98% -1.89% 5.57% 2.13% 0.49% 1.94% 0.49% 0.44% 0.26% 1.34% 1.48% 1.63% 3.02% 1.42% 0.16%
Avg. SBF Total Return 2.47% 7.53% 6.94% 5.45% 3.45% 2.02% 1.57% 4.24% 4.84% -3.26%10.06% 4.62% 1.90% 4.05% 0.45% 1.09% 0.27% 2.27% 1.73% 0.85% 4.58% 3.99% -0.15%
Inflation 2.19% 3.38% 2.83% 1.59% 2.27% 2.68% 3.39% 3.23% 2.85% 3.84% -0.36% 1.64% 3.16% 2.07% 1.46% 1.62% 0.12% 1.26% 2.13% 2.44% 1.81% 1.40% 1.70%
Avg. USBF Total Return Avg. SBF Total Return Inflation 8THE POWER OF INVESTING
SBF Ending Value:
$13,649.76 $14,000.00
$13,500.00
USBF Ending Value:
$11,946.29 $13,000.00
$12,500.00
Prime MM Ending Value:
$10,705.31 $12,000.00
$11,500.00
Govt. MM Ending Value:
$10,574.79 $11,000.00
$10,500.00
FDIC Savings Ending Value:
$10,110.37 $10,000.00
$9,500.00
FDIC Checking Ending Value:
$10,070.73 $9,000.00
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Avg. FDIC Checking Avg. FDIC Savings Govt. Money Market Prime Money Market Avg. USBF Total Return Avg. SBF Total Return
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