Report from Coalition Greenwich Details How Financial Advisors are Navigating Recent Adverse Industry Events to Meet Growing Client Demand
NEW YORK, Dec. 15, 2022 /PRNewswire/ — Talos, the premier supplier of institutional digital asset buying and selling expertise, at this time launched survey findings from Coalition Greenwich revealing that US Financial Advisors (FAs) are fielding considerably elevated demand from buyers for digital belongings regardless of the present crypto winter. Conducted in partnership with Talos, the survey reported that 92% of mass prosperous and excessive web price (HNW) shoppers are asking for entry to digital belongings for inclusion of their portfolios. Among the 537 FAs surveyed, 30% responded that they have already got or plan to suggest particular digital asset funding merchandise throughout the subsequent three months.
The outcomes are notably fascinating as they have been taken throughout the third quarter of 2022, following the collapse of TerraUSD, Luna and Three Arrows Capital that shook the digital belongings world, and preceded the autumn of FTX. With digital belongings pushing deeper into the 2022 bear market, the Coalition Greenwich report got down to determine how these latest market occasions impacted investor demand. Additionally, the survey checked out how advisors are responding, making suggestions, creating funding methods and dealing with compliance and rules associated to digital belongings. Overall, demand continues to develop with over half the advisors surveyed suggesting that shopper curiosity is rising or staying the identical as a yr in the past, with 35% saying curiosity has elevated considerably over final yr.
“Financial Advisors believe that the growth trend for digital asset adoption as an emerging asset class will persist and continue to increase, even in the face of the current bear market and recent market events,” stated the report’s writer David Easthope, Senior Analyst of Market Structure and Technology at Coalition Greenwich. “FAs are working to be ready to meet this demand through their integration of investment products and platforms. While the market will continue to evolve, the results of our survey suggest that the long-term demand trend remains intact among this fairly conservative segment of the market.”
You can view the report in its entirety right here.
Compliance is essential
The survey revealed that compliance approval issues significantly to advisors, extra so than both safety or threat relating to providing a digital asset platform to shoppers. In truth, 69% of FAs stated compliance approval of digital asset funding merchandise is crucial function for any digital asset platform, with compliance of the platform itself additionally close to the highest of the precedence checklist. Compliance got here out far forward of analysis, execution high quality and knowledge/analytics by way of important platform options.
“For FAs, compliance is simply the biggest blocker out there for investment strategies offered to clients, more so than knowledge or even risk,” continued Easthope. “In fact, 64% of advisors who said they had not yet created an investment strategy for clients primarily due to compliance restrictions making it difficult or even impossible.”
When it involves the execution and buying and selling assist FAs would most prefer to see within the platforms they provide to shoppers, 76% stated they’d most prefer to see digital execution capabilities, whereas 56% stated inclusion of information and analytics was important. The report additionally revealed that advisors prioritize ease of use and integration as a precedence with 68% citing the significance of a single system for managing digital belongings alongside different shopper belongings.
ETFs dominate product demand
With an increasing number of advisors recommending digital asset merchandise to their shoppers, probably the most recognizable, effectively understood and mainstream merchandise get nearly all of consideration. To that finish, nearly two-thirds (64%) of advisors surveyed stated they’ve or will suggest an exchange-traded fund (ETF) associated to digital belongings. According to the report, “the available options for ETFs are expanding and there appears to be pent up demand for these products. Also getting attention are other fund structures like OTC trusts and other investment funds. Simply put, ETFs are a must have, likely due to their simplicity and regulated status.”
Platform options for FAs
When it involves the execution and buying and selling assist FAs would most prefer to see within the platforms they provide to shoppers, 76% stated they’d most prefer to see digital execution capabilities, whereas 56% stated inclusion of information and analytics was important. The survey additionally revealed that advisors prioritize ease of use and integration as a precedence, with 68% citing the significance of a single system for managing digital belongings alongside different shopper belongings
“As digital assets go increasingly mainstream, financial advisors and other service providers need access to reliable, compliant, end-to-end trading systems,” stated Talos CEO and co-founder Anton Katz. “At Talos, we’ve seen these requirements underscored by the increasing institutional adoption of our white-label offering, now used by millions of retail end-users globally. The Talos white-label offering – one of many solutions Talos provides to institutional investors – enables third parties, including FAs, to leverage our secure, market-proven, end-to-end trading platform to their clients. While institutional investors have assumed a heightened sense of caution following the collapse of FTX, we believe demand for solutions that enable FAs and others to develop and evolve their digital asset offerings will continue to increase in the long-term based on this report.”
Survey methodology
During the third quarter of 2022, Coalition Greenwich partnered with Talos to survey 537 Financial Advisors throughout the US. The FAs surveyed all primarily served mass prosperous, excessive web price, or a hybrid mixture of those shopper segments. The FAs surveyed work for a diversified and consultant set of companies throughout the next segments: financial institution/wirehouse, insurance coverage, unbiased and institutional companies.
About Talos
Talos powers digital asset buying and selling methods globally. Engineered by a workforce with unmatched expertise in constructing institutional buying and selling programs, the Talos platform is trusted by the biggest and most refined market members and their finish shoppers for its efficiency, reliability, and safety. Its rising community of providers – buying and selling platform, market, knowledge and analytics, and portfolio and settlement instruments, all supplied straight or by means of service suppliers on a white-label foundation – allow shoppers of every type to transact end-to-end with out concern for pointless middleman threat or potential conflicts of curiosity. Talos has workplaces in New York, Europe, Cyprus and Singapore. For further info go to www.talos.com.
About Coalition Greenwich
We are a number one supplier of strategic benchmarking, analytics and insights to the monetary providers business. We specialise in offering distinctive, high-value and actionable info to assist our shoppers enhance their enterprise efficiency. Headquartered in London, we’ve got 400+ professionals working in London, Paris, New York, Stamford CT, Mumbai, Singapore, and Tokyo.
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