Crypto regulation is getting clearer. Advisors are still behind: Onramp CEO

It’s typically the financial advisor who educates the client on an investment — but when it comes to cryptocurrency, it might go the other way around.

“Clients are coming to advisors for the first time knowing more about this than [them],” says Tyrone Ross, CEO of Onramp Invest, a startup crypto tech platform for financial advisors.

Whether or not financial advisors want to advise on crypto, they should know enough to answer questions — and they should at least know whether their clients are holding it, says Ross, who discussed crypto with Financial Planning technology editor Ryan W. Neal at Arizent’s biannual INVEST Conference.

Depending on where an advisor works, many are already getting access to crypto solutions for their clients. Morgan Stanley said in March that its advisors would have access to bitcoin, and it later released a guide for advisors on how to talk about the asset class with clients. CI Financial, a Canadian asset manager that has been scooping up billion-dollar RIAs in the U.S. since last year, recently launched Bitcoin and Ethereum funds.

Cryptocurrency is on its way to becoming mainstream, according to Ross, although “I don't think we've gotten there yet,” he says.

So what’s holding advisors back? Several things: regulation, education and custody concerns, to name a few.

It’s regulation that is typically most concerning for advisors, Ross says, but the government’s guidance is clear enough for advisors who are keeping up with it. The SEC has released a handful of guidance notices since last year, clarifying valuation methodologies, books and records, custody and pricing, and policies and procedures — “those are the big five,” Ross says.

At Onramp, Ross is trying to get cryptocurrency into an advisor’s everyday portfolio — into their financial plans, investment management, rebalancing and estate planning conversations with clients. Also importantly, Onramp will aim to show them what crypto their clients hold elsewhere — and leave it up to the advisor how they want to charge for advice on it.

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Ross reminded viewers of the underlying value of cryptocurrency through the transformational impact it can have on poor communities.

“I don't care about price,” Ross says. “You know what I care about? The millions of people in this country, the billions around the world that are now closer to financial access because of Bitcoin.”