Page 41 - Investment Advisor April/May 2022

ALTERNATIVE INVESTMENTS

By Jane Wollman Rusoff

Advisors’ Crypto Adoption Will Rise

‘Profoundly and Quickly’: Adam Dell

The head of Domain Money highlights the signs that crypto is headed for

the advisory mainstream.

o most folks, cryptocurrencies Financial Planning Association.
are as perplexing as they are That [advisor] number is going to change
Tintriguing and enticing. To most profoundly and quickly. The research
advisors, they arouse skepticism, but the coverage [on] crypto that’s coming out
founder of a new investing platform says of the large financial firms — Morgan
he’s seen signs that’s about to change Stanley, Goldman Sachs, Fidelity — [is an
“profoundly and quickly.” indication] that crypto as an asset class is
In an interview with Investment becoming much more mainstream. And
Advisor, Adam Dell, founder and CEO advisors will follow suit in making these
of Domain Money and former head of products available to clients and advise
product at Marcus by Goldman Sachs, them on how to avail themselves of them.
explained what crypto is really about: Those firms [mentioned above] and
“You can invest today in the tech- investors should hold in their portfolios? Citi, Raymond James, Jefferies, Credit
nologies that will make up the operating Adam Dell: What’s very clear is that Suisse have all started to set up research
system of finance in the future” — and blockchain technologies are going to teams dedicated to cryptocurrencies.
you needn’t be a venture capitalist or get become the operating system of finance. The large houses start with research,
in early on an IPO to do so, he enthuses. The engineering and the developer com- and then they start products.
Indeed, Dell is certain that people should munities have decided that the energy
invest in crypto “not as a novelty, but as a and momentum around improving tech- But why should an investor have crypto
core component of their portfolio.” nologies associated with moving money in their portfolio?
In January, Dell, 52, who identifies as around — the fundamental function of From a diversification standpoint,
“a serial entrepreneur,” launched Domain banking and finance — are going to live that certainly is why. It’s [clearly] a
Money, his fifth company. It is a platform on top of blockchains. reasonable hedge against inflation in
for both self-directed trading and turnkey many markets, [especially] when there’s
actively managed crypto strategies. What does that mean to investors? instability around currencies and infla-
Dell states that crypto in a portfolio It used to be the case that if you wanted tion. High inflation is certainly a risk in
benefits diversification and can be a to get access to new technologies that the United States.
hedge against inflation, but “the most were going to disrupt large markets, you Investors who are looking for sig-
exciting thing” is that “blockchain tech- either had to be a venture capitalist or nificant upside in their investments
nologies are going to become the operat- get in early when those companies went should consider crypto as a percent-
ing system of finance.” public. That’s not the case here. You age of their portfolio. Whether that
Before joining Goldman Sachs, Dell don’t need to be a venture capitalist, and should be 5% or 10% is a function of
started the companies Clarity Money — you can invest today in the technologies an individual’s ultimate risk tolerance.
which Goldman acquired — Buzzsaw, that will make up the operating system Someone looking for higher returns
Civitas Learning, and MessageOne, of finance in the future. That’s the most and is willing to take a little more risk
the last acquired by Dell Technologies, exciting thing about this asset class. might go a bit higher, maybe to 10% or
the firm founded by Adam’s brother, 15%, depending on their risk tolerance
Michael Dell, who is five years his senior. You say that crypto is appropriate as or desire to achieve yield. Obviously,
Adobe Stock Investment Advisor: Why are only 14% of financial advisors use or investors should be thinking about that
this asset class is quite volatile. So
Here is an excerpt of our interview:
a “core component” of portfolios. But
relative to their allocation.
cryptocurrencies an asset class that
recommend crypto, according to the
APRIL/MAY 2022 INVESTMENT ADVISOR 39