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9 Things Financial Advisors Must Know About Crypto

9 Things Financial Advisors Must Know About crypto

As digital assets and the crypto ecosystem continue to grow, it is apparent that traditional banking services will be an entity of the past. Peer-to-peer transactions allow for the continual growth towards individual financial freedom and flexible decentralized banking. With the world changing for the better, the cryptocurrency market is here to stay. Financial advisors will need to familiarize themselves with the ins and outs of decentralized finance in order to better serve their clients in a timely and efficient manner.

Financial advising is about relationship building. Crypto must be discussed to satisfy fiduciary responsibility.

Communication is at the heart and foundation of every advisor-client relationship. It is critical for clients to know their advisor has their best interests in mind while both parties adapt to the world of crypto. Although digital advances have made strides for financial freedom and accessible banking, problems are still likely to arise. When navigating certain investment concerns, clients look to a face they can trust to discern solutions with. The dependency on their advisors to help consult when these problems arise is equally as important, especially in an emerging digital financial industry. 

Know what to pitch, and what not to pitch (not all cryptocurrencies are created equal).

Not all cryptocurrencies are created equal. Coins such as Bitcoin and Ethereum are less risky than most digital assets on exchanges. For example, Bitcoin’s accessibility is stronger than competing Altcoins due to the greater volume of software, merchants, exchanges and implementations which help support operations. Your clients’ needs will vary, so if an elderly woman is looking to diversify her portfolio, she may want to stick with a safer cryptocurrency such as Bitcoin etc. However, other clients may have more flexibility and different risk tolerances that are important to note and pitch accordingly.

Leverage your fiduciary responsibilities as a means to have a conversation built on trust.

Understanding that not all coins are fit for every investor and articulating the wide variety of risks is essential to building trust.  Communicating that you would never advocate for an asset that was against your clients’ risk preference will help clients feel more comfortable. With accessibility to technology, instant transactions and the luxury of banking from the comfort of one’s home, people often forget the overwhelming importance of a financial plan. Clients will still rely upon advisors to maintain their fiduciary responsibilities at the epicenter of their financial relationship. There are decisions that technology cannot take all the responsibility for, and having an understanding of when or why clients should make a particular decision is crucial. 

Transition the conversation from Short-Term expectations to Long-term investment strategies.

Investing in digital assets can be more similar to venture capital time horizons. There are many opportunities to profit in the short term, but the industry is young, so it is best to approach crypto from a longer-term investment horizon than typical equities entertain. With an ever-changing market, it is important not to be caught in a panic sell or impulse buy, but rather plan for investments that will serve well over time. It is important to see what coins are consistently growing in the market, as these will prove to achieve the most long-term value, as opposed to coins that are hot today and gone tomorrow.

Be prepared to provide regular updates on industry developments, especially regulatory changes.

In order to best serve your clients, you will need to welcome industry advancements with open arms. The introductory days of investment apps, Venmo and online banking at one time seemed foreign, and now they have been universally adopted.  The same progression will likely follow suit for digital currencies and assets. The gradual regulation of cryptocurrencies will make the market more stable and suitable for a variety of client investments. Thus, it is essential to be aware of regulatory decisions as they will directly affect the universal adoption of cryptocurrencies. 

As a result of staying up to date on industry trends, be prepared to pitch new types of digital assets and investment opportunities.

Decentralized finance (DeFi) is a great example; there are constant changes that are taking place within the industry. The marketplace for DeFi services will only go up from here, as we have seen the cryptocurrency market-cap already reach a trillion dollars.  Being prepared to educate your clients on new opportunities will increase the likelihood that they invest in these at an earlier stage for the best growth opportunities. As we watch the value of coins such as Bitcoin and Ethereum continually rise, remember they too started at the bottom. Being on the initial cusp of innovative coins and technologies can prove to be a beneficial payout for your customers. You want to be confident in your knowledge so that you can pitch the most lucrative and fruitful investment opportunities.

Digital Assets are not just about financial well-being, they’re about massive changes occurring at the societal level.

You want to be prepared to explain why cryptocurrencies matter to society. While they are great investments, there is risk, and addressing the fundamental value proposition of digital assets will make the conversation easier. It is important for clients to understand that the mainstreaming of digital assets allows for every individual to participate in an economy without barriers imposed by fees, geographical borders, or other boundaries. Being able to explain the large variety of use cases involved, as well as the capabilities of the decentralized structure will help clients see that this conversation is about more than just finance. 

You don’t have to go at it alone, there are plenty of educational resources and asset managers to support you and your clients as you gain exposure to digital assets.

Blockchain technology is only growing as the Crypto industry is here to stay in 2021. Advisors will need to embrace the power and potential of this industry by doing their due diligence and staying informed. Luckily, Wall Street-focused educational and marketing firms like Sarson Funds specialize in educating financial advisors to support their clients in their digital asset discovery with resources ranging from policy overviews, investor guides, investment strategies and more. Additionally, Sarson Funds can actively manage your client accounts based on risk tolerance. 

It’s never too late to get involved in crypto.

 Although the industry has experienced unprecedented growth, it has significant room to run. Institutions are investing, corporations are adding it to their balance sheets, and governments are clarifying the regulatory landscape. All of which is to say that this is only the tip of the iceberg. As influencers ranging from Elon Musk and Jeff Bezos to rapper Soulja Boy are showing interest, the conversation is certainly continuous and ever developing. Regardless of who you are, digital assets are here for you.

By Abigail Almonte

Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at


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