In the current environment, many individuals find themselves holding more cash than they might have done previously.

In a higher interest rate environment, cash savings have felt more attractive. Liquidity provides flexibility and peace of mind.

However, over time, holding excessive cash can present its own risks. Even when rates are higher, they may not keep pace with inflation, meaning the real value of cash can still decline

Inflation, even at more moderate levels, gradually reduces the purchasing power of cash. In addition, opportunities for longer-term growth may be missed.

The key is not to eliminate cash, but to ensure the balance is right.

Questions worth considering include:

• How much liquidity do you realistically need?
• Are there funds that could be working more effectively?
• Does your current structure reflect your future plans?

For many clients, the answer lies in a blended approach — maintaining sufficient liquidity, while ensuring the remainder of their wealth is positioned to grow or generate income appropriately.

Important notice: Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depends upon individual circumstances and tax rules may change.

The FCA does not regulate tax advice. This client letter is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.

Disclaimers: The information contained in this client letter is for general consideration only and is subject to change dependent on specific legal implementation. Tax treatment depends on individual circumstances and may also change in the future.

You should not take, or refrain from taking, action based on its content and no part of this document should be relied upon or construed as any form of advice or personal recommendation. Accordingly, Raymond James has no responsibility whatsoever for all and any losses that may result from such action or inaction and it is essential that professional advice is taken. If you have any questions, please speak to your wealth manager in the first instance.

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