A newcomer to the already competitive digital advice space is betting on the thriving cryptocurrency market to offer investors robo-advice services with a focus on digital assets.
Makara, a Seattle-based registered investment adviser with the Securities and Exchange Commission, is gearing up to offer automated services for users to invest in crypto through passive exposure to digital assets via seven “thematic baskets,” said Makara co-founder Jesse Proudman.
Makara’s baskets are composed of different cryptocurrencies, and the investor allocates money into a basket and owns the underlying coins in the basket. These baskets will be auto rebalanced based on the parameters of each specific basket and market conditions.
Makara’s “index-like” experience is powered by custodian Gemini, and the appropriate cryptos based on the basket’s parameters are bought and stored in the investors segregated account. Makara also handles the appropriate transaction reporting for clients’ tax preparations.
With Gemini as Makara’s exchange and custody partner, the selection of assets Makara may offer through its baskets will be restricted to those assets that Gemini supports. Currently, Gemini Custody supports 45 digital assets, according to its website.
Markara plans to share full details of its fee structure at launch, Proudman said, but it will be a combination of a 1% management fee plus an annual fee.
That fee is higher compared with established robo-advisers like Betterment and Wealthfront where investors can get started for a 0.25% annual advisory fee. Makara does intend to waive fees for the first six months for the customers that join its waitlist pre-launch.
There already are cryptocurrency exchange platforms, like Coinbase, and a handful of fintechs that offer access to digital assets including Square’s Cash App, Robinhood, Sofi and PayPal.
Still, Proudman has the belief that its product addresses the need for investors that aren’t familiar with the complexities of digital assets to invest on autopilot.
“Exchanges work great for investors who are comfortable or familiar with this asset class and the last thing the world needs right now is another exchange,” he said. “Most of these apps offer thousands of unvetted crypto assets with limited guidance on what’s appropriate for each investor. That can be incredibly intimidating and confusing for most.”
Makara will launch as a mobile-first experience targeting iOS, Proudman said, with an Android and web version to follow. The new robo-adviser’s technology platform is licensed from crypto hedge manager Strix Leviathan that provides actively managed exposure to the digital asset markets.
A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.
Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.
Some in the industry say that more UBS financial advisors this year will be heading for the exits.
The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.
Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
