What You Need to Know
- Morgan Stanley's move into crypto surprised some onlookers.
- “In the next year or two, Bitcoin will be as common in client portfolios as stock ETFs,” says Ric Edelman.
- RIA Edelman Financial Engines aims to announce its cryptocurrency strategy for clients soon.
Shortly after Morgan Stanley announced Tuesday that it is giving some clients access to Bitcoin funds, Edelman Financial Engines said it was moving to provide its clients with an offering very soon, while other players like digital platform provider Onramp Invest are pushing to get into the market quickly, too.
The RIA Edelman Financial Engines “is actively exploring methodologies for adding digital assets to client portfolios, and I’m hopeful that the firm will be announcing its strategy for clients within a short period of time,” founder Ric Edelman told ThinkAdvisor Wednesday.
“The firm’s plan is to make digital assets available to both current and new clients at their option, based on the advice of their financial planner. Currently, the option is not being offered,” Edelman added Thursday.
The RIA, which has about $260 billion in client assets, is “not likely” to need to file any registration statements for its offering, he said, “as the firm will likely be recommending securities that invest in digital assets — not the digital assets themselves. This will make adoption as seamless as every other mutual fund and ETF that the firm provides to its clients.”
Remarking on Morgan Stanley’s move this week, the industry veteran said: “I am surprised that a major Wall Street firm has opened its doors to Bitcoin before most independent investment advisors have done so, and I applaud Morgan Stanley for its leadership — which will give advisors across the country and other firms the confidence that they can do the same.”
As for where the market for cryptocurrency products is headed, “In the next year or two, Bitcoin will be as common in client portfolios as stock ETFs,” Edelman said.
“I have to be honest. I was shocked by [the Morgan Stanley news]. It’s huge,” said Onramp Invest CEO Tyrone Ross. “They front-ran [us] by like 10 months.”
While he views Morgan Stanley as “a trailblazer in terms of adopting new tech, … it’s fascinating to me that you have [broker-dealers] now moving quicker than some of the largest RIAs in the country … ,” Ross told ThinkAdvisor. “We are living in unprecedented times.”
Compared to large broker-dealers, such as the wirehouses, “I don’t think RIAs have the tools that they need” to take care of digital assets and other complex products, he explained.
“The RIAs have to do that on their own. They have to vet the custodians. They have to vet the resource partners … ,” Ross added. “That’s why Onramp exists. Because RIAs are just unclear about all of this, and we’re trying to provide that link so they can do what now Morgan Stanley advisors have access to.”
While he “can’t give away too much” about Onramp’s digital asset plans, Ross says the firm is “going to launch soon.”