Ben Cruikshank, Flourish Head, joins Yahoo Finance to discuss Flourish Crypto, which allows for RIA direct bitcoin investing.

Video Transcript

ZACK GUZMAN: Welcome back. In today's crypto corner, we've been talking about increasing adoption when it comes to wealth managers, financial advisors getting involved with cryptocurrencies. There have been some, I guess, troubles in maybe letting people access crypto when it comes to that side of the business. But today, interesting moves at a subsidiary at MassMutual, Flourish opening up access to the registered investment advisors on the platform. More than 400 RIAs on the platform representing a $1 trillion in assets under management. And the company rolling out Flourish Crypto to open up crypto access. And for more on all of that, happy to welcome into the program, the man behind it, Flourish head, Ben Cruikshank joins us now.

And Ben obviously makes waves any time you see a company like MassMutual attached to the on ramps in crypto. But talk to me about what you're doing there at Flourish to open up the access and what it means for helping out clients tap crypto.

BEN CRUIKSHANK: Absolutely. Our mission at Flourish is to provide financial advisors with innovative access to financial products that help them secure their clients' financial futures. And we already worked with thousands of advisors representing tens of thousands of end clients today. Today, we're excited to announce the launch of Flourish Crypto, which provides financial advisors with a turnkey cryptocurrency investing solution for them to offer to their clients.

While cryptocurrency investing has gone mainstream, financial advisors have largely been left sitting on the sidelines. Hear from advisors every single day that the existing solutions that are out there that are helping millions of Americans access cryptocurrency are not necessarily a good fit for them and their clients. And so that's something we hope to change today with Flourish Crypto giving registered investment advisors and their clients a simple, secure, compliant way of accessing this new asset class and bringing it into their practice.

ZACK GUZMAN: And doing it in a way that's above board is obviously pretty important for anyone when you're kind of investing on the part of clients. Talk to me about how this is maybe different than maybe other paths that existed before. I'm thinking about Grayscale's kind of similar but not officially ETF products. Their funds, or other ways that maybe had been out there before.

BEN CRUIKSHANK: When we speak with financial advisors, we typically hear that they have three approaches to the world of cryptocurrencies today. Number one is they can ignore it entirely. Number two is they can send their clients to the large existing retail exchanges. The problem with doing that is that those advisors then completely lose sight of those assets and can no longer help those clients incorporate cryptocurrency into the financial plan. The third method, as you noted, is that there is a number of existing financial products out there that may be an appropriate way of accessing crypto for a certain investor. But they also come with very well-known drawbacks, tracking error, premiums and discounts, high fees, liquidity issues, investor accreditation requirements, you name it.

With Flourish Crypto, we're giving advisors a direct way to invest in the solution. So help their clients buy, hold, sell cryptocurrencies directly, more akin to a retail exchange. But really critically integrated deeply with the advisors' businesses. So integrated with their technology, speaking their language when it comes to regulatory and compliance, offering them the ability to trade or transfer on behalf of clients, or bill on these assets if they choose. So the key part of our launch and what's really important to understand is that we're bringing a direct ownership solution directly to the REA channel in a way that they haven't been able to access the asset class before.

AKIKO FUJITA: I mean, I imagine that this is dictated by the demand that you see in the market right now. And what are you hearing from these financial advisors about the interest level that is increased, particularly in the way in which, or at least just clients who are saying, look. I want some exposure to crypto but I just don't know how?

BEN CRUIKSHANK: The interest we hear is overwhelming. One recent study found that over 80% of financial advisors have recently been asked by their clients about investing in cryptocurrency from speaking with dozens of financial advisory firms around the country. I can certainly confirm it is one of the hottest questions that's on every advisor in every client's mind. So I think the interest is really there. The other thing I would really note is how much this has changed in just such a short period of time.

When we started talking to firms about cryptocurrency investing, started talking to advisors about it a year ago, they were looking for education. Flash forward 12 months and virtually every single firm we are talking to today is interested in understanding what a solution could look like for them. Financial advisors, they are a more conservative group by nature. They have to be due the way they're regulated and the responsibilities that they hold. And so I would never say, and we would never say, cryptocurrency investing is appropriate for every single client. That's really an individual determination that each firm and each advisor makes with each client, at the end of the day, personalized to that client's needs.

But what we can say fairly definitively is we think it's time for every single advisory firm to have at least one person who's dedicated to understanding the world of cryptocurrency and thinking about bringing solutions to their practice to meet that real and growing demand from clients.

ZACK GUZMAN: That's pretty interesting. And you teamed up with Paxos too, one of those big names in the custodian space we've talked about in making this secure. But the question that I have is we talk about crypto as a $2 trillion asset class and potentially opening up here $1 trillion in assets under management. I'm sure not all of it's going to go into crypto. But it's incrementally in the right direction. When it comes to what is open here, is it just Bitcoin to start? Or what kind of cryptos will RIAs in your platform be able to access?

BEN CRUIKSHANK: On day one, we're providing support for Bitcoin. But based on the feedback we're receiving very actively from advisors, expect to add support for Ethereum in a rather short period of time, weeks or months. Once you go past those two cryptocurrencies, the regulatory landscape becomes a little less clear. SEC staff has given clear guidance that Bitcoin and Ethereum are not considered securities, which opens up the possibility of incorporating them within each advisor's business. The SEC has not given that guidance for virtually anything else in the world of cryptocurrencies.

And because the SEC is ultimately the primary regulator for the entire investment advisory space in the United States, most of the firms we're talking to today think it would be prudent to start with Bitcoin and potentially Ethereum. And that's matched by the questions that they're receiving each and every day from their clients. And take a wait and see approach to everything else that's out there in the industry. We certainly think that to understand the world of crypto, you likely need to start with understanding Bitcoin as the first, the most preeminent, the most important cryptocurrency to date.

So we're hoping to give advisors that first on ramp, translate cryptocurrencies into the language that they're used to speaking in, engaging with every day, and integrate it within their practice so they can start to be conversant. And then we can all watch the regulatory landscape as it evolves going forward.

AKIKO FUJITA: Yeah, it's been fascinating to see how quickly things have evolved in this space. Ben, appreciate you joining us today. Ben Cruikshank, the head of Flourish, joining us from right here in New York.