Onramp Invest, a platform financial advisors use to manage cryptocurrency portfolios for investors, published a report on January 21 that suggested advisors are acting negligently by not giving clients advice about crypto and recommended the Certified Financial Planner Board of Standards make changes to its exam curriculum.
The 55-page report, titled “A Crypto Review of the CFP Curriculum” and authored by three Onramp employees, outlines eight topic areas that Onramp says are worth consideration by the CFP Board, the organization in charge of the most popular professional designation for wealth managers. There are more than 92,000 CFP designees.
"With the number of cryptoasset investors growing daily, we believe it is no longer acceptable under the CFP Code of Ethics to ignore our clients’ cryptoassets and failing to give clients advice about their cryptoassets could be considered a breach of fiduciary duty,” the report says.
The report also explains how crypto can play a role in the financial planning process and could be incorporated into the exam that financial advisors must pass to become a CFP designee.
“In typical Onramp fashion, we pulled a Simone Biles and did a Yurchenko double pike into the course material (we think we stuck the landing too),” the company said in a blog post about the report.
The CFP Board wouldn’t give the report the same score.
Advisors don’t need to worry if choosing not to advise clients on crypto is a breach of their fiduciary duty. While the CFP Board’s code and standards do not specifically mention digital assets, “the fiduciary duty is sufficiently broad to cover all types of investments, and the Code and Standards does not single out any specific type of investments,” Leo Rydzewski, the CFP Board’s general counsel, told RIA Intel.
Adam Blumberg is a CFP designee and co-founder of PlannerDAO, the organization behind the Certified Digital Asset Advisor (CDAA) course and designation created in 2020. He said that advisors who give any advice on crypto without educating themselves about the asset class or considering the needs of a client would be in breach of their fiduciary duty. “The things that Onramp is pointing out throughout this report are absolutely valid, that so many of the things that financial planners [or] financial advisors are going to have to learn about crypto are different from what they already know,” Blumberg said.
However, Blumberg does not agree with Onramp that an advisor who chooses not to give advice on crypto could be failing to act as a fiduciary.
“If it is just an advisor saying, ‘look, I haven't learned about that, therefore, I can't talk to you about it,’ I don't think that's a breach of fiduciary duty because they haven't given an opinion one way,” Blumberg said.
The changes Onramp suggested to the CFP Board exam are also unlikely.
Every five years, the CFP Board conducts a study of wealth management practices to help it determine what knowledge its exam and certification should require. The most recent study in 2021 found an update was necessary to the list of Principal Knowledge Topics, which will be incorporated into the CFP exam starting March 2022. Cryptocurrencies and other digital assets were not specifically added.
“Non-traditional assets will always be a part of the investment landscape and the emergence of digital assets requires CFP Board to stay apprised of its development,” John Loper, managing director of professional practice at the CFP Board, told RIA Intel. “It is understandable that Onramp would like to see digital assets more specifically integrated into the CFP exam; however, no changes are required to our exam at this time.”
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Like with other types of investments, the CFP Board will continue to accept continuing education programs (CE) focused on digital assets, Loper said. The CFP Board has more than 40 active programs related to digital assets that it accepts for education credit.
“Our position is that CFP professionals should learn as much as they can about digital assets, but that knowledge would be more appropriately obtained as a separate course,” Loper said.
In the January 21 blog post, Onramp said it planned to send the report to the CFP Board “for further discussion at their discretion” but it hadn’t done that yet, according to Caitlin Cook, head of community and vice president of operations at Onramp and co-author of the report.
Cook told RIA Intel that Onramp tagged the CFP Board in social media posts about the report last week and sent it to Kamila Elliott, the CFB Board’s new chair, who requested a copy. Elliot, through a spokesperson for the CFP Board, deferred questions about the report to Rydzewski and Loper. The CFP Board declined to comment further about its communication with Onramp.
Onramp, it turns out, was not intent on pushing the CFP Board to make the changes it suggested in the report.
Cook admitted she was unfamiliar with how the CFP Board made changes to its code of ethics or exam. Rather than try to change the curriculum of the CFP exam, the authors wanted to use the CFP Board — something many advisors are familiar with — to draw attention to the report and the importance of education about crypto, Cook said.
“We simply used the CFP framework, which has already been created, already well respected by this business and well understood, to try to get advisors to understand this new asset class. Because when you're educating crypto and [decentralized finance], it can get very overwhelming very easily,” she said.
Onramp hopes the report will spur conversations between it and the CFP board — Cook said that since publication, the report has received positive feedback.
“We welcome any collaboration with them,” Cook said. “If the CFP Board would like to collaborate or have a conversation in more depth about it in a more formal manner, we would love to do that. We feel that you know, education above everything is our mission.”
Cryptocurrency is a growing asset class and one advisors are consistently being asked about.
Flourish, a technology company best known for its cash management solution, launched a similar platform to Onramp in September of 2021. In December, WisdomTree Investments and Ritholtz Wealth Management, one of the most high-profile RIAs, partnered to create a cryptocurrency index.
In a survey conducted by NYDIG on Bitcoin published in March 2021, 82 percent of clients surveyed expected their advisors to be a knowledgeable source about Bitcoin, though only 21 percent of clients brought it up. The survey also showed that 22 percent of advisory clients owned Bitcoin, but only 3.5 percent held Bitcoin with their advisor.
Holly Deaton (@HollyLDeaton) is a staff writer at RIA Intel and based in New York City.