Guest: Justin Castelli, an executive at Onramp Invest, which is a technology company that provides access to crypto assets for registered investment advisors. He’s also the founder of RLS Wealth, which is an RIA firm in Fishers, Indiana. And he’s the co-founder of The AGC, which is an organization that connects financial advisors across the globe to collaborate and grow both personally and professionally.
Insight: Think Bitcoin and other crypto investments aren’t right for your client base? You may be right. But what happens when their kids and grandkids are looking for an advisor who does know what an NFT is and can advise them on how to manage digital assets? Retiring baby boomers are starting the largest wealth transfer in history. Their heirs are digital natives, many of whom have already bought Bitcoin on their own. If you don’t want to add crypto to current portfolios, you at least need to have a working knowledge of the technology and an informed opinion that your clients can trust.
3 Quotes from Justin Castelli:
1. In 2017, most of what I saw was clients asking me questions. They were just curious. What is this? Should I be paying attention to it? How does this fit into my plan? And they’re just general questions and they were asking because they knew I was researching and learning about it because I was putting it on my blog and they get my blog every week. In 2019 and 2020, I did have some clients that actually joined the firm knowing that I couldn’t actually help them with their Bitcoin. I couldn’t help them with crypto, but they liked the fact that me as a financial advisor was willing to talk about it, that I was looking at this new technology, that I wasn’t dismissing it and talking negatively about it because they believed in it. Just the willingness to talk about it, to learn about it and share that was actually received well by prospective clients, and they were ideal clients for who I wanted to work with at the time.
2. 99% of advisors today, when it comes to crypto, should just be thinking about educating themselves, and then educating their clients. Most advisors probably shouldn’t be allocating to this. Most clients probably shouldn’t be putting it in their portfolio. So at this point, it’s kindergarten, just learning about the space, understanding the different terms that are very important to understand before you even get to allocating to it.
3. As much as I love the space and I’m excited about things that are going on, I also believe that my clients will reach their goals if we have zero allocation to Bitcoin. I believe my clients will reach their goals if we stick to a traditional diversified low-cost portfolio and spend our time focusing on behaviors and making good financial decisions. I don’t think Bitcoin fixes somebody’s portfolio and fixes their plan. Do I want to omit it for clients that might want it? No. So, I’m not a Bitcoin maxi. I’m a Bitcoin believer. I want to have it in the portfolio for those that are interested, but I’m not going to jam it in somebody’s portfolio just because I think they should have it because, again, with the risks and the volatility, I don’t want to put something in my client’s portfolio that’s going to make them panic and force me to sell something at the worst time. My ultimate job as a financial advisor is to make sure my clients reach their goals without forcing my opinions and beliefs on them.
Justin Castelli, CFP®
Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies Is Changing the World by Don Tapscott and Alex Tapscott
Note: You can listen to my podcast with Blockchain Revolution author Alex Tapscott that I recorded shortly after his book was published.
Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond by Chris Burniske and Jack Tatar