Uday Singh and Mike Tropeano, Broadridge

“Great moments are born from great opportunity, and that’s what you have here tonight.” Herb Brooks, head coach of the 1980 USA Men’s Olympic Hockey Team was not talking about cryptocurrency, but this nicely sums up the unique opportunity wealth managers currently have to grow revenue, expand their books of business and develop deeper relationships with their existing client base through the new asset class.


According to new research from Broadridge Financial Solutions , using a five-year model, financial advisors and wealth managers are set to receive up to $4.6 billion in incremental fee revenue through cryptocurrency. And the impact is likely to be even greater as advisors develop new relationships due to cryptocurrency’s appeal to a wide demographic. According to research from Gemini, the average age of crypto investors is 38, while the average “crypto-curious” individual is 44. 

And just as offering cryptocurrency is a long-term business decision, there are significant cost ramifications if a firm consciously chooses not to offer it. The disruption is real, and firms will eventually need to include it as an investment option. It is not a matter of if—it is a matter of when. 

That’s because managers and advisors may lose existing clients and assets if investors do not view them as having a viable cryptocurrency solution. Wealth managers may be losing out on AUM amid one of the greatest generational wealth transfers, as younger investors show increased interest in cryptocurrency and may be seeking out advisors who provide access to the alternative asset class. According to the Gemini study referenced above, 77% of crypto holders in the U.S. are under the age of 45, and many in that group will make up the next generation of wealth. Gemini also projects that an additional 20 million adults in the U.S. will enter the crypto market “very soon,”​ adding further urgency to advisors’ decision-making.

Merging onto the crypto highway. This is a new asset class with unique characteristics and business models will need to change to support it. That’s why wealth managers need to consider the time and effort it will take to integrate the necessary components to process cryptocurrencies.  

The next steps a firm takes are dependent on how they want to incorporate cryptocurrency into their client portfolios. Choosing a liquidity provider will impact which coins you will be able to provide to your clients. Regardless of how you plan to provide crypto, your liquidity source must align with the cryptocurrencies included in a planned offering. No one platform provides access to all coins but the best providers offer a wide variety of coins and have the ability to remain nimble to expand into new coins as they come to market.

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When deciding on custody, you will need to evaluate security, costing model and ability to meet your service needs. Other guidelines include developing an understanding how instant settlement will work and considering the impact to clients of maintaining cash balances at the provider.

The choice of liquidity provider and custodian will help clarify whether you plan to offer a proprietary investment product, direct access to coins, recently launched ETF or the next breakthrough product. It will also help determine what partners need to be leveraged and what your target operating model will look like. 

Adding cryptocurrency as an investment option can take six to 12 months, depending on the infrastructure. Many organizations lack internal subject matter expertise, struggle with where to start and aren’t sure of the questions that need to be answered. Some turn to partners with deep subject-matter expertise to help them define the technology, operational risk, and compliance ecosystem and to assist them in educating advisors.

There has never been a more critical time to find the right talent, partners and technology ecosystem that will allow you to capture your share of the billions in fee revenue currently in play.

Uday Singh and Mike Tropeano

Photo Illustration by Staff

Uday Singh is managing director, head of Broadridge Consulting Services. He leads his Broadridge Consulting team in addressing the challenges of the banking, asset servicing, and wealth management industries. He drives positive outcomes through data-derived strategies. His pioneering work in data collection measurements led to both reduced cycle time and improved decisioning.

Mike Tropeano is a senior director and engagement manager for the Broadridge Wealth Consulting Practice.  He is responsible for providing clients with actionable insights and thought leadership addressing technology and operational challenges. His background includes crypto currency, managed services, digital transformation, and straight through processing. 

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