Bitcoin has rallied in 2023 and financial advisors are continuing to hop on the bandwagon, but that doesn’t mean all is well in the world of digital currencies.
I’m sorry, I meant digital securities. No? How about digital uncorrelated assets? Except cryptocurrency fell alongside the stock and bond markets. Hmm, well how about digital gold as a hedge against inflation? Darn, that doesn’t work either.
Anyway, the digital place to put real money continues to struggle even though the largest digital asset, bitcoin, is showing some price resiliency. Crackdowns on the industry are going far beyond FTX founder Sam Bankman-Fried, with the Securities and Exchange Commission turning its sights this week on Do Kwan, founder of the company behind the Terra “stablecoin” that turned out to be unstable. Crypto giant Binance could be next and is considering pulling out of its U.S. operations.
Crypto investors whose accounts have been frozen are now facing tax bills, and former NBA star Paul Pierce agreed to pay $1.4 million to settle charges related to allegedly touting token without disclosing that he was paid for it.
Speaking of sports, notice how there were no crypto ads during the Super Bowl this year? Just one year after celebrity endorsements filled the broadcast, crypto commercials were entirely absent from 2023's game (though there were plenty of ads for gambling).
The total number of cryptocurrencies has fallen to 8,685 — 1,700 fewer than there were in early 2022, when nearly 1,000 new products were launching each month, according to Statista.
Punxsutawney Phil saw his shadow this year, predicting six more weeks of winter. But for the digital asset world, the crypto winter may be much longer.
A recent study conducted by Magnifi, a digital marketplace of investments from fintech provider Tifin, found that 41% of people in the U.S. would embrace investing guidance from an artificial intelligence. A third of respondents said they most look forward to using AI to analyze historical data and trends, while a quarter want it for conducting faster investing research, and 17% want it to assist in monitoring finances to ensure they stay on track toward goals. Only 16% reported feeling negatively about AI.
As I wrote in a recent column, the idea the “people will always want a human advisor” can’t last forever. People are not only increasingly seeing the value automation can bring to their financial lives, they are also increasingly comfortable with. Yes, financial advisors will continue to have jobs for the foreseeable future, but those that don’t evolve their attitudes along with consumers will find themselves left behind.
Facet Wealth is dropping the “wealth” from its name as part of a brand overhaul that includes a complete redesign of its user experience. The company charges an annual membership fee to access a certified financial planner, and rebranding to just “Facet” aims to better represent that the company provides financial planning to more than just the wealthy.
The company has raised significant funding and now serves 18,000 clients. However, this rebrand is another significant shift for the company in just a few years. In 2018, Facet’s strategy was to buy small, unprofitable accounts from traditional RIAs. The company later focused on partnering with employers to provide financial planning as a benefit. For a few years the emphasis has been on how its business model better serves the public than traditional AUM fees, and the newly shortened name looks to drive that home.
Digital brokerage Interactive Brokers was named the primary international broker for Sinopac Securities, a Taiwanese investment banking firm. Through Interactive Brokers, Sinopac’s institutional and retail clients can trade U.S. stocks, ETFs and fixed-income securities, and Interactive Broker’s clients elsewhere in the world can access the Taiwanese stock market.
We don’t often cover international markets, but the development fits with something Interactive Brokers recently told me while researching my upcoming cover story on the Schwab-TD merger. Part of IB’s pitch to advisers as an alternative custodian is access to investment products they can’t get elsewhere, such as international securities. This partnership with Sinopac demonstrates that.
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