How MassMutual’s Flourish Dives Into Crypto

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Ben Cruikshank, Director of Flourish, joins Yahoo Finance to discuss Flourish Crypto, which allows investing directly in bitcoin RIA.

Video transcript

ZACK GUZMAN: Welcome back. In today’s crypto corner, we talked about a growing adoption when it comes to wealth managers, financial advisers getting involved in cryptocurrencies. There have been, I guess, issues getting people to access crypto as it relates to that side of the business. But today, interesting movements in a subsidiary of MassMutual, Flourish, open access to investment advisers registered on the platform. Over 400 RIA on the platform representing $ 1,000 billion in assets under management. And the company has deployed Flourish Crypto to open up access to crypto. And to find out more about all of this, happy to welcome in the program, the man behind, Flourish head, Ben Cruikshank is joining us now.

And Ben obviously makes waves whenever you see a company like MassMutual strapped to crypto ramps. But tell me about what you are doing there at Flourish to open up access and what it means to help clients mine for crypto.

BEN CRUIKSHANK: Absolutely. Our mission at Flourish is to provide financial advisors with innovative access to financial products that help them secure the financial future of their clients. And we’ve already worked with thousands of advisors representing tens of thousands of end customers today. Today, we are excited to announce the launch of Flourish Crypto, which provides financial advisors with a turnkey cryptocurrency investment solution that they can offer to their clients.

While investing in cryptocurrency has become mainstream, financial advisers have largely been left on the sidelines. Hear every day from advisers say that the existing solutions that help millions of Americans access cryptocurrency aren’t necessarily right for them and their clients. And so this is something that we hope to change today with Flourish Crypto offering registered investment advisers and their clients a simple, secure and compliant way to access and integrate this new asset class into. their practice.

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ZACK GUZMAN: And doing it in a flawless way is obviously pretty important to anyone when you’re sort of investing on the part of clients. Tell me about how maybe this is different from other paths that were there before. I am thinking of the kind of similar products but not officially ETFs from Grayscale. Their funds, or other means that may have existed before.

BEN CRUIKSHANK: When we speak with financial advisers, we usually hear that today they have three approaches to the world of cryptocurrencies. Number one is that they can ignore it altogether. Second, they can send their customers to the big existing retail exchanges. The problem is, these advisers then lose sight of those assets altogether and can no longer help these clients integrate cryptocurrency into the financial plan. The third method, as you have noted, is that there are a number of financial products out there that may be an appropriate way to access crypto for a certain investor. But they also come with well-known drawbacks, tracking errors, bonuses and discounts, high fees, liquidity issues, investor accreditation requirements, and more.

With Flourish Crypto, we offer advisors a direct way to invest in the solution. So help their customers to buy, hold, sell cryptocurrency directly, which is more like a retail exchange. But really critically integrated with the activities of the advisers. Thus integrated with their technology, speaking their language of regulation and compliance, giving them the possibility to trade or transfer on behalf of clients, or to invoice these assets if they wish. So, the key part of our launch and what is really important to understand is that we are bringing a direct ownership solution directly to the REA channel in a way that they weren’t able to access the asset class previously.

AKIKO FUJITA: I mean, I imagine it’s driven by the demand you see in the market right now. And what do you hear from these financial advisers about the level of interest that’s being raised, especially in the way, or at least just the clients who say, look. I want crypto exposure but don’t know how?

BEN CRUIKSHANK: The interest we’re hearing is overwhelming. A recent study found that over 80% of financial advisers were recently asked their clients about investing in cryptocurrency by speaking with dozens of financial advisory firms across the country. I can certainly confirm that this is one of the most burning questions that comes up with every advisor in the minds of every client. So I think the interest is really there. The other thing I would really like to note is how much that has changed in such a short time.

When we started talking to companies about investing in cryptocurrency, we started talking to advisors about a year ago, they were looking for training. Fast forward 12 months and pretty much every business we talk to today wants to understand what a solution might look like for them. Financial advisers, they are by nature a more conservative bunch. They must be due to the way they are regulated and the responsibilities they hold. And so I would never say, and we would never say, that cryptocurrency investing is appropriate for every customer. It is truly an individual decision that each firm and each advisor makes with each client, ultimately personalized to the needs of that client.

But what we can say for sure is that we believe it is time for every consulting firm to have at least one person who is dedicated to understanding the world of cryptocurrency and thinking about bringing solutions to their practice to meet this real and growing customer demand.

ZACK GUZMAN: It’s quite interesting. And you also teamed up with Paxos, one of those big names in the conservation space that we talked about to secure that. But the question I’m asking myself is that we are talking about crypto as a $ 2,000 billion asset class and potentially opening up $ 1,000 billion in assets under management here. I’m sure not everything will go in crypto. But it is gradually in the right direction. As for what’s open here, is it just Bitcoin to begin with? Or what kind of cryptos will the RIAs on your platform be able to access?

BEN CRUIKSHANK: On day one, we provide support for Bitcoin. But based on the feedback we are getting very actively from advisers, expect to add support for Ethereum in a fairly short period of time, weeks or months. Once you get past these two cryptocurrencies, the regulatory landscape becomes a little less clear. SEC staff have made it clear that Bitcoin and Ethereum are not considered securities, which opens up the possibility of incorporating them into the activities of each advisor. The SEC has given that direction for virtually nothing else in the cryptocurrency world.

And because the SEC is ultimately the primary regulator for the entire investment advisory space in the United States, most of the companies we speak with today think it would be safe to start with Bitcoin and potentially Ethereum. And that matches the questions they get from their customers every day. And take a wait-and-see approach to everything out there in the industry. We certainly think that in order to understand the world of crypto, you probably have to start by understanding Bitcoin as the first, most preeminent, and most important cryptocurrency to date.

We therefore hope to give advisors this first step, translating cryptocurrencies into the language in which they are used to speaking, engaging on a daily basis, and integrating it into their practice so that they can start to get familiar with. And then we can all observe the regulatory landscape as it evolves.

AKIKO FUJITA: Yeah, it’s been fascinating to see how quickly things have evolved in this space. Ben, thank you for joining us today. Flourish boss Ben Cruikshank is joining us from here in New York.

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