"Right amount, no more. Right duration, no less." An appropriate allocation
to crypto is Right for many clients, but just as
importantly, the Right performance expectations and time
horizon are essential elements when investing in the digital world.
There can be little doubt that RIAs that willfully
encourage or knowingly allow their clients to maintain overly high allocations
of their portfolio in crypto will be judged harshly in the event of
deep losses. And yet, I would also argue that in 5 to 10 years' time, and
perhaps even sooner, those advisors who chose not to advise their
clients to have even the slightest allocation to these asset classes may be
judged just as harshly. The operative words are of course…appropriate
allocation and time horizon. If you are
an RIA crypto minimalist, one that dismisses outright the
potential of blockchains and digital assets to have the potential for
long term, exponential growth…you may of course be right, and thereby spare
your clients the loss or under performance of a small portion of your client's
portfolio. Yet, if the tsunami of institutional, private and sovereign
investors that have flocked to the space are right…not only have you locked
down and guaranteed relative underperformance for your clients, but
you have almost assuredly weakened the confidence that clients have in your
advice. While you are entitled to personally hold a dismissive view on the
relative import of digital assets, you owe it to your clients to offer a sober
but balanced perspective on these new investment opportunities. Even a
1-2% long-term allocation of an overall portfolio to crypto could
lead to an outsized, positive impact to a client's overall returns.
Not For Profit RIAs Should Disregard the Following
Again, a modest attempt a levity, but I have yet to meet a non-profit RIA (snarky
comments about loosely defined visions of RIA success shall be
suppressed for the time being) that did not subscribe to the notion of doing
well by doing well for others. It's nonsense…of course an advisor should
be compensated for doing strong work on behalf of their clients. In that
spirit, allow me to offer a couple of observations about the power of
adding crypto solutions to your practice…solutions that could
possibly have a significant economic impact to both your recurring revenue and
your exit. First, I return to a previous assertion that clients are going
to invest in crypto with or without you (I think we can all agree on
a preference for "with" you). Again, including solutions like
Rubicon Crypto, even with just a 1-2% allocation of your overall book of
business, has the potential to generate exponential AUM growth.
And, perhaps more importantly, that very same
exponential AUM has the downstream impact of exponentially increasing
the valuation of your practice.
Fortune Favors the Brave (and rationally exuberant)
The same argument you should make to clients…exposing a small
percentage of their assets to the digital world is worth the inherent risks
given the opportunity for disproportionately higher returns…can be made to
the RIA practitioner. Actually, the upside may in fact be even
greater to an RIA should the current trend in private equity backed
practice acquisitions continue with their significantly higher valuation
multiples. Oh, and not to mention, failing to offer solutions like
Rubicon Crypto's portfolios to your clients opens the door for
other RIAs to walk in and place a wedge into your relationships (did
I mention that they are going to buy crypto with or without you?).
We firmly believe that the coders and technologists behind the
all the innovation in the digital asset and cryptocurrency world will
over time have an increasingly outsized role in the financial markets
and the global economy as a whole. And, we also believe, and with a nod
to arguably the first celebrity Federal Reserve Chairman, Allan Greenspan,
"that there now exists a climate of irrational exuberance"
with respect to cryptocurrencies and digital assets, one that could
exponentially hurt investors, indeed your clients, absent a more disciplined,
diversified, pragmatic and actively managed approach. The
Rubicon Crypto approach.
Rubicon Crypto gives you the power to offer turnkey
investment portfolios to your clients that complement your asset allocation
philosophy. Our common sense, easy to implement solutions can help you
attract new clients, gather incremental assets under management and distance
yourself from other practitioners in the industry that are frozen in time. With
over 60 years of industry experience on our team, we understand the full
spectrum of challenges you face. We know how hard it was to build your
book of business, to manage a robust practice, to navigate the shifting demands
of industry regulation and firm level compliance, and, perhaps the most
challenging of all, we know how difficult it can be today to meet or exceed the
expectations of evermore demanding and knowledgeable clients.
Let us show you how our solutions can help your clients who are
crossing the digital divide do so with common sense, with rational exuberance…and
with you.