MassMutual-owned fintech Flourish is introducing a new service to connect financial advisors to Bitcoin
A fintech company owned by MassMutual is launching a service that enables Registered Investment Advisers (RIAs) and their clients to tap into Bitcoin investments.
Flourish’s new service, called Flourish Crypto, reflects the growing intersection between traditional finance and the digital asset space and is a bet on what the company claims is growing demand from financial advisors for Bitcoin.
The offering is launched in partnership with Paxos who support the execution and custody side of things. The New York-based startup has built important relationships with payment and financial services companies over the past few months, including the groundbreaking deal with PayPal last year and a recent deal with Interactive Brokers. Paxos announced a $ 300 million financing round last spring.
Ben Cruikshank, head of Flourish, said the new service came from talking to his client base of financial advisors. “We have heard from countless consultants that they ask questions about cryptocurrencies every day – and that they do not have the right solutions to meet this growing customer demand or to compete with offers from trading platforms and wirehouses,” he said.
Cruikshank also told The Block that the company’s work on crypto has fueled the company’s workforce for years – an interest that meshed with MassMutual after the insurance giant’s acquisition of Flourish in February.
Flourish operates independently from MassMutual, but the insurance giant made waves in December when it bought $ 100 million in Bitcoin through NYDIG. At that time, MassMutual also became a stock investor in NYDIG.
In conjunction with today’s announcement, Tim Corbett, Chief Investment Officer of MassMutual, wrote a blog post setting out the insurance company’s views on digital assets, and Bitcoin in particular.
“We see Bitcoin as a potential long-term store of value,” Corbett wrote, referring to the $ 100 million investment last year. “Bitcoin’s unique properties – including digital scarcity, known supply growth, transmission characteristics, and a hard cap on the total number of tokens – open up the possibility that it can serve as a kind of“ digital gold ”with the potential for significant price increases. ”
“At the same time, the asset class is new and still pricing, with significant volatility, uncertainty and risk,” continued Corbett. “We believe that volatility will decrease as more institutions take positions in this area, but it will take several market cycles before we have robust data to further describe the properties of the asset, such as inflation protection.”
Corbett added, “In our position as the leading mutual life insurance company, we have the opportunity to think so long-term.”
That Flourish is trying to capture some of the Bitcoin demand from financial advisor clients may not come as a surprise, given that other financial services firms, including those focused on retirement accounts, have made similar forays in recent years. Choice by Kingdom Trust, for example, recently explained The Block’s Ryan Weeks about how the company plans to help its customers buy bitcoins within their retirement accounts.
Flourish’s approach is to provide a single point of contact for advisors to help their clients access Bitcoin. Although Bitcoin has been considered a commodity by US regulators since 2015, the tax reporting hurdles and lack of familiarity of some advisors – and especially those who take calls from prospective customers – open the door to companies like Flourish to simplify these processes.
“We listened to our customers and built Flourish Crypto with the flexibility consultants need in terms of integrations, trading, branding and compliance,” says Cruikshank siad. “Advisors can now keep these assets in orbit and offer a crypto solution as part of each client’s holistic financial plan.”
Cruikshank added that the company is closely monitoring the broader crypto space. He said Flourish intends to support Ether, Ethereum’s native cryptocurrency, in the coming months based on the same signs of demand that led to its support for Bitcoin.
Corbett’s blog post also indicated that MassMutual is keeping an eye on the proverbial pond for possible services around cryptocurrency and blockchain technology in the broader sense.
“We believe that there will be numerous success stories as technology evolves, and we will continue to look for ways to incorporate cryptocurrencies into different areas of our business,” he wrote.
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