VIPs venture into crypto, but many advisers still hesitate
What would you like to know
- The recent launch of the Onramp Invest platform could help attract more RIAs to crypto.
- But the challenges, including the SEC delaying the approval of cryptocurrency ETFs, continue to persist.
- Crypto is also still too risky to recommend to clients, says Andrew Graham, managing partner of Jackson Square Capital.
The late May launch of Onramp Invest – with Ritholtz Wealth Management as the initial investor – and Dynasty Financial Partners rolling out its first crypto options for its advisers could help persuade more AIRs and other advisers to start offering cryptocurrencies to their customers.
But ongoing challenges – including the postponement of the Securities and Exchange Commission decision on the approval of the first Bitcoin exchange-traded fund – continue to cause hesitation among advisers, executives at RIA told ThinkAdvisor. industry experts.
Onramp is a crypto-asset integration platform for financial advisers led by investment advisor Tyrone Ross. It is defended by a number of eminent personalities in the consulting sector; it lists Danielle Fava from Investnet, Jamie Hopkins from Carson Group, Jason Wenk from Altruist, Douglas Boneparth from Bone Fide Wealth and Anthony Stich from Advisent among its advisers and investors.
Dynasty, for its part, has partnered with Eaglebrook Advisors to bring Bitcoin and other digital asset investment strategies to its network of independent advisory firms.
Movement, but slowly
“I think the Onramp platform will make it easier for advisors to have their clients assigned to crypto,” said Joel Bruckenstein, head of Technology Tools for Today (T3).
“Based on our experience last year when we asked Ric Edelman,” founder of Edelman Financial Engines, “to organize a half-day seminar on crypto, it seems to me that he There is movement in that direction, but it has been slow so far, ”Bruckenstein told ThinkAdvisor by email on Tuesday.
“Most advisers are a conservative group, and it takes time for new ideas to be fully considered and accepted in the market,” he said.
In addition, “more education is needed” in the counseling sector, he said. “I think when the SEC starts approving crypto ETFs, it will give crypto additional legitimacy as an asset class.”
Meanwhile, Timothy Welsh, president, CEO and founder of consultancy firm Nexus Strategy, said he believes that “when industry leaders like Dynasty and Ritholtz embrace something new, it bodes well for business. ‘to come up”.
But echoing Bruckenstein, he said: “The AIR industry has always been a conservative and ‘fast’ market. RIAs want to wait and see if a new trend or approach is sustainable and doesn’t blow anyone up.
His prediction: “Once some credible businesses get past the guinea pig stage, seek wider adoption. In this case, the crypto still has so many unknowns that it takes time, but inevitably RIAs and the ecosystem that supports them will customize the solutions, and then it’s off to the races.
Waiting for the SEC
More optimistic was Tommy Marshall, executive director of the Georgia Fintech Academy, who also stressed the importance of the SEC’s approval of crypto ETFs.
“I think we will continue to see more and more AIR offer cryptocurrency investment capabilities for clients,” he predicted. “One simple reason is that sophisticated clients demand that this type of investment be available in the portfolio.
He added, “The market will also soon be offering cryptocurrency ETFs as soon as regulatory approvals allow. … As these ETFs become available, a much larger group of AIRs will have a relatively easier way to provide exposure to cryptocurrencies in client portfolios.
San Francisco-based RIA Jackson Square Capital is not yet offering crypto investment options to clients, for whom the company manages around $ 375 million in assets, according to Andrew Graham, its founder, managing partner and manager. portfolio.