Blockchange Ventures: Blockchange Digital Asset SMA for RIAs
Arbor Digital and Blockchange have partnered to offer a new SMA tool that enables RIAs to outsource the management of their client’s digital portfolios by using a framework to account for protocol maturation, ecosystem adoption rate, and project governance. The new SMA tool removes the legwork of digital asset allocations and also exposes advisers to a wider range of assets from Bitcoin and Ethereum allocations to a spectrum of DeFi (decentralized finance) and utility tokens.
In this article first published on investmentnews.com in February 2021, we heard from Matt Kolesky, Director of Arbor Digital, and Ric Edelman, Founder of the RIA Digital Assets Council.
An excerpt from “Blockchange intros digital asset SMA for RIAs” by InvestmentNews
In partnership with Arbor Digital, a division of wealth management firm Arbor Capital with more than $250 million assets under management, Blockchange launched the True Digital Asset SMA, according to an announcement last Tuesday. The new SMA tool enables RIAs to outsource the management of their client’s digital portfolios to Arbor Digital, which actively constructs digital asset portfolios by using a framework to account for protocol maturation, ecosystem adoption rate, and project governance.
Here’s how it works: Arbor Digital manages the SMA by leveraging Blockchange’s BITRIA Digital Turnkey Asset Management Platform to onboard clients and manage portfolio allocations, with all assets custodied by Gemini Trust Co.
While financial advisers who want to expose their clients to digital assets today have several options via digital trusts and funds such as the Grayscale Bitcoin Trust (GBTC) or the Bitwise 10 Index Fund, digital trusts can expose investors to premium risk and are frequently limited to a single asset, according to the announcement.
With the launch of Arbor’s True Digital Asset SMA, Blockchange is addressing the advisers’ struggle to incorporate digital assets when the risks aren’t worth the return on investment, said Blockchange CEO Dan Eyre.
“RIAs don’t want to manage digital assets and they don’t want to take the time to learn the asset class,” Eyre said. “But they know they have to take an allocation somehow, and they get the investment thesis, and they know what the upside is. The concern that those advisers typically have is how to keep digital assets under their overall AUM umbrella.”
In that light, the new SMA tool removes the legwork of digital asset allocations and also exposes advisers to a wider range of assets from Bitcoin and Ethereum allocations to a spectrum of DeFi (decentralized finance) and utility tokens.
“Vehicles like the Arbor True Digital Asset SMA simplify the journey for RIAs who want to engage with digital assets,” said Ric Edelman, founder of the RIA Digital Assets Council. “Advisers need solutions like this that make it easy to add digital assets to client portfolios.”