Cryptocurrency: How Advisors Can Get Up-to-Date


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Education is the foundation of the financial advisor-client relationship. Consultants need training – not just before they start working, but throughout their careers. In return, the most effective financial advisors train their clients and empower them to make informed financial and life decisions.

However, the rapid expansion of the crypto asset markets has not given the advisors the kind of grace period to learn about this new and novel asset class that they had with traditional investments.

In addition, the growth of crypto assets has mainly been driven by retail investors. This has created a dynamic where in some cases clients understand the asset class better than their financial advisors.

Lack of education about crypto assets has been a constant topic of conversation with other financial advisors. As SEC Commissioner Hester Peirce announced in our recent interview, it is the fiduciary responsibility that financial advisors have towards their clients to be well informed about crypto assets. But as I mentioned in my previous article on the current regulatory landscape of crypto assets, there is a steep learning curve when it comes to this emerging asset class.

It goes far beyond knowing the difference between cryptocurrencies and cryptoassets. In this column, I’ll outline the big areas and provide some reference links for a mix of books, articles, research, and podcasts to get you started.

Education zones

  1. The basics: A basic understanding of crypto assets with the ultimate goal of being able to have a conversation with customers. This includes terminologies such as coins, tokens, centralization, decentralization, blockchain and DeFi. It also includes understanding the differences between Bitcoin versus Bitcoin, Bitcoin versus Ether, and Hot versus Cold Storage. Finally, it includes understanding the major companies and projects that are being built in this space.
  2. Practice management: How cryptoassets fit into the advisor’s practice. As I discussed in my last article, there are a number of complexities when it comes to this emerging asset class. Financial advisors need to update the language of their ADVs, ensure they have proper error and omission coverage, and empower their client-facing team members to receive the proper education and training to discuss crypto assets. In addition to regulatory considerations, advisors also need to address billing, reporting, and integrating crypto assets into their technology stack.
  3. Financial planning: The decision on whether to trade and allocate crypto assets does not affect the financial advisor’s need to understand how to treat crypto assets in their clients’ financial plans. Cryptoassets have unique tax planning implications and opportunities, as well as record keeping issues. They also have estate planning problems that traditional investments and asset classes don’t have. This knowledge of taxes and estate planning alone gives advisors the opportunity to offer their clients enormous added value and stand out from their fellow financial advisors.
  4. Portfolio construction: Even if financial advisors decide not to assign crypto assets on behalf of their clients, they still need to understand how the asset class fits into their client’s portfolios if their client owns those assets elsewhere. When advisors decide to add crypto assets to their client portfolios, they need to consider creating new model portfolios, building these new model portfolios, opting for active or passive management of the crypto assets, the difference between owning the crypto assets and how to use an exchange traded fund or trust and how to explain crypto asset allocation to clients.

This is not an exhaustive list, but it does give a hint of the work that financial advisors have to do in becoming familiar with crypto assets.


So where do you start?

As with any research conducted by financial advisors, the source of information should always be considered – especially with a new and novel asset class such as cryptocurrencies.

There are many “crypto experts” who have built a reputation for themselves from the hype and speculation, making it difficult for advisors to trust their messages. Add to this the fact that legacy consultancy organizations are careful with education and certification efforts related to cryptosystems, and much of the media coverage treats crypto planning as a “hopium.”

At the same time, advisors should be open to different lines of thought – especially opinions that differ from their own – in order to really gain a deep understanding of all aspects of the crypto asset space.

With that in mind, here are some resources I can recommend.

  • “Bitcoin: A Peer-to-Peer Electronic Cash System” by Satoshi Nakamoto. This is the basic white paper that started it all:
  • Cryptoassets from Chris Burniske and Jack Tatar. This book is widely regarded as the smart investor in crypto-assets: a staple for those entering the crypto-asset realm.
  • Interaxis and its CDAA certification program. Interaxis offers a range of instructional videos and articles on its website, and the CDAA program is a structured curriculum that enables advisors to learn the basics of crypto assets while earning an award.
  • Delphi-Digital. Delphi provides users with data-driven research and analysis on the crypto asset market along with in-depth educational podcasts.
  • CoinDesk. CoinDesk’s Learn Center provides an introduction to cryptoassets and the broader blockchain ecosystem.
  • Wisdom tree. Institutional research and asset class commentary.
  • Geminis Cryptopedia. A free platform that makes it easy to understand cryptos and covers everything from basic terminology to specific decentralized financial projects.

Diving into a new and fast-paced asset class like crypto assets can be intimidating, but if you fail to familiarize yourself with crypto assets, you run the risk of financial advisors failing to meet the needs of their clients and, more importantly, their trustee can maintain responsibilities. Starting with a solid understanding of the basics will prove useful in all aspects of a financial advisor’s practice now and in the future, and with the resources above, advisors can have a clear starting point.

Tyrone Ross is the CEO and co-founder of Onramp Invest and the founder of 401stc, a storytelling consultancy. He is a graduate of Seton Hall University and was a 2004 Olympic qualifier in athletics over 400 meters. He was named one of the Top 10 Advisors to Change the Industry by Investment News 40 under 40 (2019) and, was recently named one of Investopedia’s Top 100 Financial Advisers and Think Advisor IA25: VIP’s Pushing in 2021 Called Advisors Forward. The views expressed in this article do not necessarily reflect those of Morningstar.


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