The Rise of Separately Managed Accounts in Traditional Finance and the Benefits in Crypto
As a crypto reader, you may have questions about investing in digital assets and how you can gain exposure to this asset class. Many financial advisers are unaware of the available investment vehicles for their clients in the crypto space and the pros and cons associated with them.
A recent survey reveals that 90% of financial advisers have received client inquiries about crypto in the past year. This highlights the growing interest in digital assets among investors. However, advisers must carefully consider various factors, including security and compliance, when allocating to this asset class.
Currently, financial advisers have several options, including instructing clients to self-direct their investments on retail crypto exchanges like Coinbase, using over-the-counter trusts such as the Grayscale Bitcoin Trust, investing in private funds, or choosing a crypto separately managed account (SMA).
The Advantages of Crypto Separately Managed Accounts
Separately managed accounts have experienced significant growth over the past decade, with assets under management reaching $1.7 trillion in 2021. Wealth managers prefer SMAs due to their tax optimization, direct ownership, professional management, and customization benefits. Consequently, the wealth management market is increasingly adopting crypto SMAs as the preferred investment vehicle for this emerging asset class. Here are some of the advantages:
Hot Take: The Rise of Crypto Separately Managed Accounts
The growing interest in crypto investments has prompted the rise of separately managed accounts as a preferred vehicle for wealth managers. With advantages such as tax optimization, direct ownership, reporting integration, professional management, and institutional custody, crypto SMAs offer a compelling solution for investors seeking exposure to digital assets. As the crypto market continues to evolve, it is crucial for financial advisers to stay informed about the available investment options to best serve their clients’ needs.
Cora Skindell is a standout figure in the world of cryptocurrency analysis, research, and editorial expertise. As a seasoned crypto analyst and researcher, Cora’s insights delve deep into the complexities of digital assets, resonating with a diverse audience. Her ability to dissect intricate crypto concepts is complemented by her adept editorial skills, enabling her to distill complex information into easily understandable content. Cora’s contributions serve as a valuable compass for both seasoned and novice individuals seeking to navigate the dynamic landscape of cryptocurrencies. With a keen eye for detail and a commitment to accuracy, she empowers informed decision-making in the ever-evolving crypto space.
