If 2021 was the year that many wealth management firms started taking cryptocurrencies and digital assets seriously, then 2022 has to be the year when financial advisors educate themselves in-depth on the topics crucial to understanding and working with them.
But where should they turn for this education?
Over the past few years, a number of educational services have come online for financial advisors, initially spearheaded by asset managers eager to give professionals enough knowledge to embrace their products and strategies.
“The digital assets space is exploding, the level of interest is growing exponentially,” said Ric Edelman, the founder of the Digital Assets Council of Financial Professionals (DACFP). “We launched our certificate in May, haven’t done much to promote it, but already have 600 advisors who have completed our courses and more than 1,500 advisors enrolled.”
One asset class, many options
Previously, firms like Eaglebrook Advisors and Sarson Funds built out their own content oriented toward financial advisors.
There’s nothing necessarily wrong with the information that asset managers put out there – in fact, they often serve as partners to unaffiliated advisor education services – but advisors perhaps more than anyone else understand that investment shops often can’t resist the opportunity to talk up their own book, at times to the detriment of alternative solutions.
That’s why a set of advisor-led resources has recently come online to teach financial intermediaries about cryptocurrencies.
One of the first, established last year, is Onramp Academy, a service developed by tech platform Onramp Invest.
“Advisors need to be educated by a group of people who understand both the crypto space and financial planning intimately,” said Caitlyn Cook, vice president of operations for Onramp Academy. “Advisors need to understand how crypto impacts their practice, and there’s not been a lot of content specific to those needs.”
“I feel like any advisor education is good to have in the marketplace, said Steve Larsen, CEO of PlannerDAO. “We feel like most certifications are just introductions and that the CDAA offers more comprehensive education that covers all areas of digital assets.”
Which offering is best?
Edelman believes that the Digital Assets Council’s certificate will be the gold standard for financial advisors. The curriculum includes 13 hours of self-study educational material divided into two parts of five modules apiece, taught by industry leaders including Edelman; Lex Sokolin, head economist and global fintech co-head at Consensys; MarketCounsel President Brian Hamburger and Shawnna Hoffman, global co-leader of IBM’s Cognitive Legal Practice.
“Part one is built around the understanding of the technology, with part two about incorporating digital assets into an investment strategy for financial advisors and firms,” Edelman said. “By completing the courses, advisors will be able to determine which clients should have an allocation to digital assets, how much that allocation ought to be and what type of investment the advisor should use to create that allocation, and in addition understand the taxation regulation and compliance issues so they can operate within the rules to serve the client’s best interest.”
But Onramp Academy has also developed an impressive curriculum with qualified instructors, in partnership with Galaxy Digital, Interaxis and CoinDesk, among others.
“We provide everything from ‘what is bitcoin or blockchain’ all the way to crypto estate planning, tax planning and getting crypto within a diversified portfolio,” said Onramp Academy’s Cook. “Our educational partners include asset managers, but also we have CFPs and practicing advisors on the team.”
The Onramp curriculum is backed by a steady stream of crypto news and resources delivered to Onramp Academy members on a regular – almost daily – basis, and a robust online and social media community of financial professionals.
PlannerDAO’s curriculum is also quite robust, but with an added bonus of offering advisors the ability to access the DAO that operates the CDAA certification and participate in the governance of the credentials.
“We view [crypto] as more of an ecosystem than an asset class,” said Larsen. “It relates to a client’s employment, their social and leisure time, the generational wealth transfer, tax planning – all areas of their finances, so it’s important that we make sure that advisors understand it. With the CDAA, people are really into this – for the first time in their careers, many advisors feel like they are connected to the industry and have a say in what’s happening.”
PlannerDAO, Onramp and the DACFP each claim to take advisors from general knowledge on the asset class to bringing digital assets into a firm or practice to specific actions and dialogues to implement with clients.
“I think what advisors really want and need is one-stop shop where they can get advised access, education, client services, in-depth research, security, compliance and technology integration,” said Eaglebrook CEO Chris King. “We make our advisors go through training modules to learn the merits and risks of investing in crypto. They need to score over 70% on our test before they can start onboarding clients to our strategies.”
A unified solution?
In the end, the best solution for advisors may be to roll digital assets and cryptocurrency into already existing designations often considered “best in breed” for different sectors of the wealth management industry. For example, the Certified Financial Planner designation offered by the Certified Financial Planner Board of Standards and the Chartered Financial Analyst (CFA) designation offered by the CFA Institute could be changed to include more digital assets education.
That idea is behind a proposal from Onramp Academy to merge digital assets education into the CFP and CFA curricula. Onramp argues that the time for advisors to learn about digital assets is now, and that most of the initial and continuing education for financial advisors is currently associated with the CFA and CFP designations.
“We strongly believe these two designations will continue to be the gold standard in the financial industry,” said Cook. “This is a multibillion-dollar asset class; we believe that the curricula for both the CFA and the CFP need to be more inclusive of technology advances over time. Digital assets are one of the bigger changes in the space; they need to be incorporated into the curricula.”
Notably, both the CFA Institute and the CFP Board appear open to the idea, as each has approved externally provided digital assets programs for continuing education credits – for example, the DACFP’s curriculum offers 13 hours of continuing education for the CFA and CFP designations.
“Everyone is talking about volatility and what we do now, but education never goes into a bear market,” said Cook. “This is a great time for advisors to have conversations with clients about crypto – but they need to get educated on the asset class first.”
