Customers naturally enough carry some cash. The cash has traditionally been managed in a AAA rated fund holding mostly government and quasi-government and other short-dated high rated securities. The Macquarie cash fund behaved quite well - unlike say Macquarie Fortress.
But Macquarie has pulled a bait-and-switch. The attached newspaper article tells the story:
I have repeated the first part of the article here for your edification:
MACQUARIE GROUP just found a cool $1 billion under its bed to address the high price of debt - or actually, under the beds of pensioners and superannuation investors.
With little fuss, Macquarie has converted the cash accounts of investors in its super manager and pension manager "wrap" investment products into deposits in Macquarie Bank.
Investors with a total of $1 billion in cash accounts have been given little choice in the matter: the switch occurred in May whether or not the investors wanted to make the move.
Or, as Macquarie told its investors in a leaflet about the change: "No action is required from you."
Investors have been swapped from the AAA-rated Macquarie Treasury Fund - which invests in a variety of money market products - into a deposit with Macquarie Group's banking division, which is rated two notches lower at A-1.
Investors have to deliberately opt out of the move by switching their cash into another cash fund if they do not want to become a depositor with the bank. Even then, they will have to maintain a minimum of $2500 in the cash account as a deposit in Macquarie, as part of their participation in the "wrap" investment platform.
For a bank, more deposits are a bonus because they are a cheaper source of funding than is available on the wholesale debt-funding market.
I don't want to breach copyright - so for the rest of the article you will need to click through to the Sydney Morning herald. Here is a link.