A digital investment platform and a fintech firm are partnering to help financial advisors manage cryptocurrencies in retirement accounts, the two companies announced today.
Blockchange, a San Francisco-based digital asset investing platform for professional wealth managers, and IRA Financial Partner, a fintech firm based in Miami, are partnering to enable IRA funds and 401(k) plans to be invested in cryptocurrencies under the management of a financial advisor, the companies said in a statement.
“The arrangement allows investors to leverage the tax-advantaged status of their IRA or 401(k) funds as they diversify into a range of cryptocurrencies," the firms said. "The new partnership means that a financial advisor can manage a comprehensive crypto portfolio for the investor, while maintaining the tax advantages of a qualified IRA and owning the underlying assets.”
Mathew Kolesky, president of Arbor Capital Management, an RIA that is working with the partnership, said in a statement that many investors want to diversify their retirement accounts by including cryptocurrencies but that advisors haven’t had an efficient way to offer exposure to digital assets in these accounts.
“The new partnership is a game changer that enables firms to expand their portfolio offering as they bring the benefits of crypto assets to their clients’ IRAs and 401(k) plans,” he said.
The process works like this: Investors set up a self-directed IRA with IRA Financial and transfer funds from an existing IRA or 401(k) plan into the new IRA. The money is then invested in crypto assets through Gemini Trust Company, a cryptocurrency exchange and custodian. The assets are managed by the investor’s financial advisor via Blockchange's digital investment platform. The partnership provides advisors and their clients access to bitcoin, ethereum, litecoin and 18 other digital assets.