Somewhere between the Coinbase hawk and bitcoin's institutional whale sits a growing class of high-end retail investors pushing their money managers to join the bull run.
Their calls have gotten strong enough for Mariner Wealth Advisors to take action. Now, the registered investment advisory (RIA), whose network of financial advisors (FA) manages $ 29 billion, is giving its 23.000 clients a way into this type of investment.
Many high-end retail investors are shifting to bitcoin
On Tuesday, Mariner Wealth announced that its 346 FAs will soon have access to bitcoin markets via a separately managed account (SMA) set up by cryptocurrency firm Eaglebrook Advisors.
The bitcoin SMA will allow Mariner FAs to trade bitcoin, hold it and calculate tax charges on behalf of their clients when fully implemented by the end of the year.
Eaglebrook CEO Christopher King said the partnership is a first step in attracting a huge class of potential investors worth between $ 5 million and $ 10 million who he said did not participate in the record-breaking bull run of the 2017.
Generally, these types of high-end retailers plan their trading in stocks, bonds and funds through FAs, but more often than not, the traditional companies behind those FAs didn't have the infrastructure to act on bitcoin, King said.
"Nobody was building for the market of consultants who work at registered investment advisory, which manages trillions of dollars," he said. (TD Ameritrade estimates that RIAs manage more than $ 4,7 trillion in client assets.)
Creating a ramp for bitcoin in a wealth consulting firm
King created an SMA for FAs to enter bitcoin markets, buy, hold, hold, sell, and calculate tax charges just as they do for other asset classes. He spent 12 months integrating the SMA with Mariner Wealth's existing portfolio reporting systems.
The idea was to make bitcoin allocations (here the quotation real-time) a seamless part of the FA's wealth management strategy, he said. “It is really important to include bitcoin in clients' wealth plans, as well as allowing advisors to bill on assets, the same way they would for Apple or Tesla or Amazon stock,” he said.
Eaglebrook offers bitcoin custody services through Gemini Trust Company at launch. As of Tuesday, Mariner is Eaglebrook SMA's only customer. King said he hopes more investment advisors will sign up.
“It's a custom solution, but nearly every RIA is structured like Mariner,” King said. "If it works for them, it will basically work for the first hundred, thousand RIAs in the country."
