Everyone in the financial advisor space knows the name Ric Edelman. Not only does he run the largest Registered Investment Advisory in the US, Edelman Financial Services (with $22B AUM) – he also speaks regularly at advisor conferences throughout the country. But late yesterday, a new offshoot emerged. It was announced that he has made a strategic investment and taken on an advisory role with Bitwise Asset Management, which has targeted the advisory space with their crypto index fund offerings. With this announcement, advisors who have been dismissing the digital currency space as having too much risk have FINALLY got to sit up and pay attention to this important and revolutionary new asset class (see press release below).
SAN FRANCISCO, Oct. 3, 2018 /PRNewswire/ — Bitwise Asset Management, the leader in cryptocurrency index funds, announced today that legendary financial advisor and best-selling author Ric Edelman has invested in Bitwise and is serving as an advisor to the company.
Edelman is the founder of Edelman Financial Services, recently named the No. 1 Registered Investment Advisor (RIA) firm in the country for 2018 by Barron’s, with $22 billion in assets under management. He will work with Bitwise in its efforts to educate and support financial advisors looking to bring diversified exposure of cryptoassets to client portfolios.
“I’m thrilled to be an advisor to Bitwise and help further its mission to bring institutional-caliber crypto exposure to investors in the U.S. and around the globe,” said Edelman. “There is a technological and financial revolution taking place right now with cryptocurrency that has far-reaching implications. Every financial advisor needs to educate themselves about this space, and most should be considering an allocation for clients. I look forward to working with Bitwise to help make that a reality.”
A recent Bitwise survey of more than 450 financial advisors found that 83% had received questions from clients about crypto. Those advisors said that “education” and “regulatory concerns” were the two primary barriers to them making an allocation to cryptoassets for their clients.
“Ric has dedicated his career to helping investors build better portfolios and prepare for their future,” said Hunter Horsley, Bitwise’s CEO. “We’re thrilled to have him supporting Bitwise’s efforts to make high-quality crypto exposure a part of every investor’s portfolio.”
Bitwise launched the world’s first cryptocurrency index fund, the Bitwise 10 Private Index Fund, in November 2017. The fund holds the 10 largest cryptocurrencies selected and weighted by inflation-adjusted market cap, with rules in place to ensure security, liquidity, and other safeguards. The fund is available to U.S. accredited investors with a minimum investment of $25,000; an “Offshore” fund is available for international accounts with a minimum investment of $100,000. For both funds, Investor Class units have a 2.5% management fee, while Institutional Class units (with assets >$1 million) charge a 2.0% fee. Investments can be made through IRAs, trusts, taxable accounts, and other entities.
Bitwise’s research supports the case for investors making a small but dedicated allocation to cryptoassets in their portfolios. From January 1, 2014, through March 31, 2018, a 1% allocation to bitcoin—properly rebalanced—would have added 4.5% in total returns to a traditional 60% equity/40% bond portfolio without increasing the portfolio’s volatility in a meaningful way.1 The bitcoin allocation increased the portfolio’s three-year Sharpe ratio by more than 20% at the end of the study.
Edelman joins a long list of prominent investors in and advisors to Bitwise from the asset management industry, including former Barclays Global Investors’ CFO Alison Davis, former Wealthfront CEO Adam Nash, and current Western Asset Mortgage Capital Corporation CIO Anup Agarwal, among others. In August, Bitwise announced the creation of a new index advisory board featuring Srikant Dash, the former Global Head of Bloomberg Indexes and former Global Head of Research and Development for S&P; and Spencer Bogart, noted crypto analyst and partner at Blockchain Capital.
“We are on the path to a cashless future, and the cryptoasset market is simply too big to ignore,” added Edelman. “Even more than that, the smart contract technology embedded in cryptoassets like ethereum has the potential to revolutionize huge portions of the financial industry. Financial advisors need to work right now to future-proof their portfolio against the technological changes taking place in the world today. Adding exposure to cryptoassets is part of that effort.”