"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.