In 2021, survey data revealed that only 15% of financial advisors were allocating crypto in client accounts. But 94% of financial advisors received questions about crypto from clients.
When looking at the tools available to financial advisors today and the excitement around crypto, this disparity isn’t surprising. Most broker-dealer platforms don’t include the option for easy crypto trading. And even if some elements of crypto trading are available, if the right commission collection and reporting functionality isn’t there, the incentives are misaligned for the financial advisor and the broker-dealer.
If you’re a broker-dealer, this should be concerning. Data shows crypto allocations within portfolios could jump to as high as 30% in 2022. If your platform does not include crypto trading for your financial advisors, you may see asset outflows in the near future. As a regulated blockchain infrastructure company, Paxos believes that access to the crypto ecosystem is imperative as the world continues to drive towards mainstream adoption.
Introducing Financial Advisor Crypto Trading from Paxos
Built to solve the barriers to accessing the fastest-growing asset class, financial advisor crypto trading from Paxos helps broker-dealers create a comprehensive wealth management solution by offering financial advisors the seamless functionality needed to trade crypto on behalf of their clients.
With financial advisor crypto trading, broker-dealers can:
- Empower your financial advisors to trade crypto on behalf of their clients.
Crypto is now a crucial aspect of a diverse portfolio. By offering financial advisors the ability to trade crypto on behalf of clients, broker-dealers create a seamless experience for their financial advisors and their clients to engage in the benefits of the crypto ecosystem
- Easily enable complex crypto functionality within your product.
Through our crypto brokerage product and a set of APIs, this feature meets the complex technological capabilities and requirements broker-dealers need to offer turnkey crypto trading in their platform: tax, allocation, settlement and commission functionality that also adheres to pricing requirements across other asset classes.
- Unlock market share and keep assets on your books.
By helping financial advisors trade crypto on behalf of their clients, you will access a new market of crypto investors, build a new revenue stream and keep all assets (including crypto) on your platform.
Interactive Brokers – one of the largest online trading brokerages with more than $320B in assets under custody – launched crypto access for financial advisors in collaboration with Paxos.
“We are pleased to offer access to cryptocurrency markets for those financial advisors who would like to make digital assets a part of their clients’ portfolios,” said Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers. “Enabling cryptocurrency trading alongside the many other asset classes available on the Interactive Brokers platform, is yet another example of our continued focus on providing financial advisors with the products and tools they need to build successful businesses.”
Financial advisor crypto trading from Paxos also enables several unique capabilities that differentiates it from other crypto infrastructure providers. This includes the ability to:
- Enable registered advisors and financial advisors to trade or manage end user assets at their discretion. This includes trade allocations where RAs and FAs can place a single order to Paxos that can be attributed to and divided among multiple clients for the same price of execution;
- Satisfy compliance requirements through independent sanctions screening to verify the identity of RAs or FAs; and
- Create a clear record of discretion for each trade by attaching an RA or FA to every transaction.
As mentioned earlier, studies show that nearly 30% of financial advisors will be allocating to crypto in client accounts by the end of 2022. If you want to create a comprehensive wealth management platform, empower your financial advisors, unlock market share and keep assets on your platform, get in touch with us today.
This is not investment advice. Paxos encourages all individuals to conduct their own research before engaging in any trading activity.