Crypto is becoming mainstream prompting custodians and financial companies scrambling to develop their crypto platforms. And advisors previously cautious about digital assets have now shifted toward recommending crypto—increasing over the last three years. This change in acceptance of crypto as an asset class is partially driven by clients asking about it or already having purchased digital assets. At AdvisorPeak, we know crypto isn’t a trend and is here to stay. We developed the wealth management industry’s first digital trading platform that allows advisors to custody and in trade cryptocurrency. 

Advisors manage asset classes. With the way portfolios have evolved, passive management is no longer the norm. Active management requires modern technologies and consistent evaluation. ESG funds are also experiencing more interest to investors and advisors alike. Things are constantly changing in the world of investing, requiring technologies to keep pace.

If you’re convinced that crypto is only a trend, the 2021 Trends in Investing Survey will convince you otherwise. According to the March 2021 survey:

  • Among the 529 respondents to the survey, 15% said they currently use or recommend cryptocurrencies with their clients (up from less than 1% in 2020).
  • 26% said they plan to increase their use or recommendation of cryptocurrencies in the next year.
  • 49% of respondents said their clients have asked about cryptocurrencies in the past six months, up from 17% in 2020.

One major aspect that advisors must consider when recommending investing in crypto to their clients is the taxes clients will pay on capital gains. Crypto opened the gateway to more complicated taxes when the IRS decided to treat crypto as a capital asset in 2018. As we know, nothing is tax-exempt when it comes to investing, requiring tax savings strategies as part of the advisory process. With the significant appreciation of crypto holdings over time, the reward often offsets the tax consequences for most investors.

Using alternative investments such as cryptocurrencies increases the opportunities available to investors. So, how can RIA firms efficiently include alternative assets such as cryptocurrencies into their clients’ portfolios?

Utilize a trading platform like AdvisorPeak that incorporates alternative investments into portfolios. AdvisorPeak customers can now leverage alternative investments and include the ability to trade fractional shares between USD and BTC, ETH, and USDT, as well as transfer assets between accounts or to any customer on the network in real-time. Contact us today to find out more!