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It’s been a busy week for cryptocurrency news just as CoinDesk was hosting its Bitcoin for Advisors virtual conference.
Speakers at the event agreed that while there are technological advances to help advisors integrate crypto assets into client portfolios, there are still a number of unresolved issues that advisors face.
Michael Kitces, chief financial planning nerd at Kitces.com, drew a line between blockchain technology, which he said is “super bullish”, and cryptocurrencies, which he “has yet to struggle” with[s] a bit with the fundamental investment thesis. “
But financial advisor Morgen Rochard, an executive member of Origin Wealth Advisers in Austin, Texas, was very upbeat about Bitcoin, saying it was the only digital asset worth investing in and that there is still upside potential.
Max Schatzow, attorney at Stark & Stark, talked about navigating digital asset compliance, saying that RIA independent owners have more leeway in recommending digital assets than financial institution employees.
Also this week, the Federal Life Insurance Company announced the launch of a new variable annuity for private placements that offers broad exposure to Bitcoin and Ether. The company has created a special insurance fund that enables investment advisors to allocate part of their clients’ variable annuity contracts to a portfolio of bitcoin, ether and other crypto assets. The fund is available to accredited investors. The airline has partnered with Gemini and Onramp to hold and trade coins, and WisdomTree to shape asset allocation in the Insurance Dedicated Fund.
Invesco launched two themed equity ETFs this week that offer exposure to cryptocurrencies and blockchain stocks. Invesco Alerian Galaxy Crypto Economy ETF (SATO) and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) started trading in the US this week; both are passively managed and offset with 6 basis points.
SATO will invest in both crypto and blockchain companies, while BLKC will invest in the same companies as SATO, as well as companies working on blockchain technology that is not tied to crypto.
In addition, both ETFs will also allocate 15% to Grayscale Bitcoin Trust, according to Bloomberg, which enables exposure to physically secured Bitcoin.
RetireOne offers an unbundled pension to Fee-based Consultants
RetireOne, an independent, open architecture charitable trust platform for paid insurance solutions, and Midland National Life Insurance Company have launched a commission-free conditional deferred pension, Constance, which, unlike other paid annuities, unbundles the insurance component from its underlying investments. This enables the advisor to manage the portfolio and assets that remain with their custodian.
This product costs about a third to half a traditional annuity, RetireOne said. Fees range from 110 basis points to 200 basis points, depending on whether the client wants an increasing or stable income in retirement and whether the advisor is managing the portfolio with a higher equity quota.
“The new thing is that the assets don’t move. You live directly with Schwab; they stay with Fidelity, ”said Ed Mercier, President of RetireOne. “And the benefit to the advisor is that instead of having to pay an average of 40 to 80 basis points for the underlying variable insurance sub-accounts, I can use whatever I use and can use my BlackRock, DFA, Schwab index funds. “Get single-digit product expenses there.”
VanEck’s latest Moat ETF adds an ESG screen
VanEck’s flagship Morningstar Wide Moat ETF (MOAT) has been around since 2012, and the asset manager is now expanding its range of Moat funds – this time with a screening for environmental, social and governance factors.
The new VanEck Morningstar ESG Moat ETF (MOTE) invests in companies that Morningstar believes continue to have competitive advantages or “moats” that have been screened for ESG risks.
“After all, ESG risks are business risks. ” VanEck’s Senior ETF Product Manager Brandon Rakszawski said in a statement. “The ability to focus on US companies with significant trenches and fewer ESG concerns compared to their peers makes MOTE a potentially powerful addition to a core stock portfolio.”
The fund will use Morningstar’s Sustainalytics ESG risk analysis to find companies that manage financially material ESG risks better than their peers and to exclude controversial companies.
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