- Tesla bull Ross Gerber said clients see digital assets’ potential, but don’t know how to get involved
- Gerber Kawasaki will start purchasing digital assets for clients directly from Gemini
Wealth management firm clients want exposure to digital assets and Gerber Kawasaki is delivering.
The Santa Monica-based firm, which has $1.8 billion in assets under management, hopes to begin purchasing assets like bitcoin and ethereum on behalf of clients through cryptocurrency exchange Gemini by March 28.
“Clients kept coming to us asking for help with digital assets,” said Ross Gerber, president and CEO of Gerber Kawasaki. “It became clear that there was an opportunity with somebody who we trusted would not only build a platform that was solid and secure, but also one that really catered to firms versus individuals.”
Registered investment advisors (RIAs) will manage client Gemini accounts like any other brokerage account, giving investors peace of mind.
RIAs have historically struggled to gain digital asset exposure for clients as bitcoin and other digital tokens are not available to purchase on most brokerage platforms that RIAs use to custody client assets. Advisors can send clients to an outside exchange like Gemini or Coinbase to buy digital assets directly, but these usually operate outside the RIA’s existing brokerage platform and can be daunting for investors unfamiliar with digital assets.
“For the last several years, we’ve said to clients ‘if you want to do this, do it on your own with Gemini,’ but the problem is that a lot of people don’t want to do that,” said Gerber. “Many people don’t have the confidence in dealing with technology to do these things on their own, plus, when you screw up with bitcoin, it’s a permanent mistake.”
Bitcoin is up nearly 90% year-to-date after hitting a record of more than $58,000 last month. Even clients with limited knowledge of the technology behind digital assets are looking to gain exposure, Gerber said.
“We are seeing an increase in engagement in the digital asset space by financial advisors,” said Ric Edelman, founder of RIA Digital Assets Council. “They recognize that small allocations of as little as 1% can materially improve returns and reduce risks, without exposing their clients to significant harm if the trade performs poorly.”
Gerber Kawasaki’s announcement follows the launch of the True Digital Asset Separately Managed Account, an investment vehicle created by Blockchange and Arbor Capital Management designed for RIAs to gain digital asset exposure for clients.
“We anticipate a snowball effect, as more advisors engage, others will do so as well,” said Edelman. “Soon, holding bitcoin in your portfolio will be as routine as small cap growth stocks.”