This post was authored by Salvatore M. Capizzi, Dunham's Chief Sales & Marketing Officer. If you have questions concerning today's topic, please call us at (858) 964 - 0500. Hold us to higher standards.

The recent failure of the Heartland Tri-State Bank in Elkhart, Kansas, on July 29, 2023, coupled with August 8, 2023, Moody's downgrade of 10 banks, underscores the current vulnerabilities in the banking sector. Despite modern economic structures and sophisticated monetary policies, banking crises can still arise, catching many off guard.

The financial services industry has seen many innovations, but few can revolutionize how financial advisors operate, secure client assets, and deliver value. In our view, Dunham's Insured Deposit Marketplace (IDM) is precisely one such innovation. Here is why.

Comprehensive Cash Protection

At its core, IDM offers a layer of protection that goes beyond the conventional protection of most cash accounts. By providing $50 million of FDIC insurance, it ensures that you are not just managing your client's assets, but you are also safeguarding your client against unforeseen banking crises on the cash portion of their allocation. This safety is not a mere feature of the Dunham Advisory Program but also a promise by the FDIC.

Empowered Flexibility

IDM's fluidity stands out in a market inundated with rigid financial products. It allows you to align your client funds with prevailing market conditions, ensuring agility and stability.

Investment Strategies for Nervous Client Seeking Growth

With IDM, you can provide a safe account to dollar cost average from with its high FDIC insurance.

Shift Risk from Principal to Rate of Return

Using the Dunham Advisory Program, you can efficiently sweep the interest earned from IDM each month into a growth-oriented portfolio. We view this as an exciting strategy because your client's principal remains guaranteed through the FDIC insurance, while only the interest faces market volatility. However, a complete loss is improbable given the global diversification across stocks, bonds, and alternative investments, ensuring a potential net positive return from the account's inception. Therefore, clients may benefit from both the historical returns of their chosen growth portfolio and the advantages of dollar-cost averaging.

Expanding Trust

In an industry where trust is the bedrock of client-advisor relationships, IDM offers an added layer of reassurance. Knowing their funds are backed by robust FDIC insurance, your clients can invest confidently, fostering stronger, more durable relationships.

Competitive Edge

For financial advisors, IDM is not just a tool but a strategic advantage. In a market where differentiation is key, IDM equips you with an offering to set you apart, making your client acquisition and retention more streamlined.

Holistic Integration

Dunham's IDM seamlessly integrates into the various Dunham Advisory Strategies. Whether for conservative investors prioritizing safety or growth-oriented clients seeking optimal returns, IDM is a versatile tool in an advisor's arsenal.

Future-Proofing Advisory Services

With global financial systems becoming more interconnected and volatile, IDM acts as a buffer, equipping you to tackle challenges head-on. By incorporating the Dunham Advisory Program featuring IDM, you are not just reacting to the present but preparing for the future.

Simplified Operations

Beyond the strategic advantages, IDM simplifies operational aspects for you. With an intuitive design and interface, you can easily navigate, allocate, and manage your client assets, optimizing both time and resources.

In essence, Dunham's IDM is more than just another addition to your financial services landscape. It represents a bridge to where your strategies are adaptive, and success is not just about growth but holistic well-being.

By integrating Dunham's IDM, you are not just offering a service for the cash portion of your Dunham Advisory Program - you are providing security, flexibility, and foresight in our ever-evolving financial landscape.

Important Disclosures:

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.

All examples are hypothetical and are for illustrative purposes only. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. The solution for an investor depends on their and their family’s unique circumstances and objectives. No two markets are the same and past performance is not an indication of future results.

No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

If you participate in the IDM offered by Dunham Trust Company (“DTC”), DTC is acting as your agent. DTC also serves as custodian of the Custom Asset Allocation Programs and is an affiliated entity of Dunham & Associates Investment Counsel, Inc., (“DAIC”), a Registered Investment Adviser and Broker/ Dealer. Member FINRA/ SIPC. DAIC is the sponsor of the Dunham Asset Allocation Program.

The FDIC insurance limit for all insurable capacities in the IDM is $250,000 per account owner, per bank, in accordance with FDIC rules. The IDM program banks may be excluded from receiving program deposits in the event that total assets at a program bank (including assets that are held with the bank outside of DTC’s IDM) exceed the FDIC insurance limits. It is your obligation to monitor your account(s), your FDIC coverage and your FDIC insurance eligibility. See for more details regarding FDIC coverage.

Excluding a bank from holding your Insured Bank Deposit balances may result in a lower available program limit for FDIC insurance. The bank list is subject to change.

See the IDM Disclosure Booklet for details, limitations, and eligibility requirements to participate in the IDM.

For the IDM, the program interest rate is impacted by several factors, including the total amount paid on deposits by the program banks, the fee paid to DTC and a fee paid to a third party that assists DTC in operating the program. DTC determines the portion of revenue it receives as a fee. The fee paid to DTC will affect the interest rate and may exceed the amounts paid to clients in the form of interest. The rate of return for the sweep option shown will vary over time and may be lower than rates available to clients making deposits directly with the bank, or at other banks, or available by investing directly in other money market funds. Neither the program banks nor DTC is required to offer the highest rates available or rates comparable to money market mutual fund yields. In contrast, money market mutual funds generally seek to achieve the highest rate of return consistent with their investment objectives, which can be found in their prospectuses.

DTC, at its discretion, may determine that your account is ineligible to participate in the IDM. IDM provides up to $50 million of FDIC insurance.

The deposit rates and annual percentage yields are variable and may change at any time at DTC’s discretion. Interest will be accrued daily and credited monthly.

Unlike the IDM, non-deposit investments held by your Broker-Dealer (such as DAIC), are NOT FDIC INSURED / NOT BANK GUARANTEED / MAY LOSE VALUE.

Please carefully consider the above information before selecting the Bank Deposit Sweep option for your uninvested cash balance. If you have any questions, please contact your advisor.

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Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA / SIPC.

Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc. Trust services offered through Dunham Trust Company, an affiliated Nevada Trust Company.