Insights

Four Things to Remember in a Banking Crisis

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Balentine
March 23, 2023
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1. The banking system in the U.S. has built-in safeguards.

The FDIC protects up to $250,000 for bank accounts, and the SIPC protects up to $500,000 for brokerage accounts. Beyond those sums, the U.S. Government has the ability to protect bank customers, and historically they have done so.

2. You can prepare for possible volatility as a part of your investment strategy.

Wealth advisors can and should custody assets separately from the advisory business. Look for a custodian to demonstrate core strength and have rigorous controls, including G-SIB classification, the most stringent of banking regulations.

3. Ripples in the private capital markets are inevitable during a bank crisis.

At Balentine, we have a “Protect and Grow” philosophy that guides us. We launched a Credit Opportunities Strategy at the beginning of the year, anticipating that interest rate hikes would create opportunity. We are constantly scanning the investment landscape for dislocations that may be advantageous for our clients. Agility here is key, as these tend to be short-lived and offer asymmetric outcomes with limited downside and attractive upside, allowing us to protect and grow.

4. A wealth advisor can help you prepare for uncertainty.

In a crisis, you’ll appreciate that you took the time to choose an advisor whose values align with your own. Selecting a wealth manager is among the most critical decisions you can make, with reverberations traveling through your life and future generations. We invite you to read our 2-part series that outlines several important criteria for consideration: How to Select a Financial Advisor.

If you are a Balentine client, you have already heard from us regarding the recent banking crisis, and you have the ongoing support of your relationship manager. For those of you outside the Balentine family, we are sharing our insights in the hopes that they might be helpful to you as you think about how your wealth is currently managed and invested. If we can ever be of assistance, don’t hesitate to reach out to us at info@balentine.com.

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