As 2022 starts to unfold, digital assets and blockchain technology seem to be everywhere.

And not just in the conversations about ongoing volatility in bitcoin, ethereum and other cryptocurrencies, said Ric Edelman, founder of the Digital Assets Council for Financial Professionals (DACFP), formerly known as the RIA Digital Assets Council.

“Digital assets are becoming ubiquitous,” said Edelman. “When you see Matt Damon doing TV commercials at the Super Bowl for Crypto.com, or FTX buying the naming rights to a sports arena with Tom Brady serving as a brand ambassador, when you see the FTX logo on the umpires’ uniforms at the World Series, you know it’s everywhere.”

Brands are raising consumer awareness of digital assets, and consumers in turn are taking the attitude that they want to buy them, said Edelman. If advisors can’t or don’t help these consumers then they will go somewhere else for advice.

Why Go Crypto?
The reasons to get involved in crypto are clear, said Edelman: Advisors need to be knowledgeable so they can serve clients.

“Advisors now realize that this isn’t going away, it’s not a fad and it’s not a fraud,” said Edelman. “This technology is revolutionary and it is being adopted by every industry on a global basis. It is going to transform commerce in an unprecedented way. I think this is the biggest thing for global commerce since the internet itself. Advisors realize now that there is a 'there' there, this isn’t going away but will be increasingly impactful.”

The asset class also has a maturing infrastructure, said Edelman, with more leading companies offering investors and advisors entries to handle and invest in digital assets.

Companies like Fidelity, Global X, BNY Mellon and most of the major banks are now engaging and providing custody, investment opportunities and other infrastructure, said Edelman. Their presence is moving bitcoin and digital assets in general away from the “wild west” of their early years and into respectability.

“The most compelling reason for advisors might be that the investment thesis is sound,” said Edelman. “Bitcoin and other digital assets have demonstrated that they are additive to portfolio diversification. The non-correlation and the outsized returns dramatically improve the risk-return composition of a portfolio as measured by metrics like Sharpe ratios, Sortino ratios, standard deviations and maximum drawdowns.”

Because these risk-measuring statistics can be improved with even a small addition of digital assets to a diversified portfolio, Edelman said that advisors are discovering that they can create better outcomes for clients.

Climbing The Learning Curve
“Advisors are also discovering that clients have an interest in the asset class,” said Edelman. “Something like 24% of all U.S. adults own bitcoin, and another 63% call themselves ‘crypto curious.’”

Those people are turning to advisors for help, said Edelman, but many advisors are discovering that they know little more than their crypto-curious clients and prospects.

That’s why Edelman’s DACFP has launched the Certificate in Blockchain and Digital Assets, an advisor designation signifying literacy in working with digital assets.

Since launching the certificate, 600 advisors have completed the course, said Edelman, and another 1,500 are enrolled.

“It is a course designed for financial advisors and executives in the investment management field,” said Edelman. “It includes compliance, investment management, financial planning, instruction and resources for sales and marketing teams.”

The course empowers advisors to incorporate digital asset classes into their practice and how to advise clients on whether to invest, how much to invest and which investment strategies and vehicles to deploy. It also offers advisors help on how to communicate with clients about digital assets, and how to integrate these assets into their investment management methodology.

Edelman said there are three main benefits to obtaining the certification: One, it demonstrates expertise in one of the biggest recent trends in the financial industry. Two, it offers certification holders access to sales and marketing content to assist them in conversations with clients and prospects. Three, advisors who achieve the certification will have free access to the DACFP’s advisor directory, a service for digital asset investors looking for professional financial advice.

“Having a certification shows that you can be relied on for advice about every aspect of personal finance,” said Edelman. “You’ll receive a digital badge that you can display on your social media such as LinkedIn or Facebook pages that demonstrates you have received your certificate. It also sets you apart from other advisors. The vast majority of advisors don’t know this topic. Having the ability to explain that you are fluent in digital assets is an effective way to attract additional AUM.”

Earning the certificate requires advisors to complete an 11-module course designed for self-paced study. Edelman said the course can be completed over a weekend, or taken slowly over a period of weeks or months.

Advisors completing the course are eligible receive 13 continuing education credits from the CFP Board, CFA Institute and the Investments and Wealth Institute.

“Each module is about an hour, give or take, and we have a world-class faculty,” said Edelman.

Learning In An Evolving Environment
That faculty includes W. Scott Stornetta, chief scientist and partner at Yugen Partners and co-inventor of blockchain technology; Anders Bronworth, a former MIT blockchain lecturer; Showanna Offman, the chair of the Commodity Futures Trading Commission’s Distributed Ledger Technology and Market Infrastructure Subcommittee and leader of IBM’s global blockchain strategy; and Del Wright, UKMC professor of finance, business and Tax, as well as Edelman.

The first part of the curriculum is about understanding the technology, including an introduction to bitcoin, an introduction to blockchain technology, an explanation of the differences between bitcoin and other digital assets, an explanation of tokens and decentralized finance (DeFi), and real-world use cases for digital assets.

Part two of the curriculum includes modules on the digital assets investment theses; investment opportunities; portfolio construction; regulation and taxation; operations, compliance and risk; and communicating with clients.

The certification program was introduced last May, according to Edelman, and is already being updated. The DACFP intends to update the program annually and offer a slate of additional continuing education courses for ongoing certification holders.

“When we created this course, there was no such thing as DAOs—or distributed autonomous organizations,” said Edelman. “There wasn’t any such thing as the metaverse. So now we’re adding content to help advisors stay current. The only way you can access these additional courses is to first obtain your certificate—then we make available additional CE opportunities for additional CE credit for those who hold certificates.”

Edelman says that the DACFP will introduce eight additional courses per year that advisors can complete for additional CE credit and to further their knowledge in the crypto space. The organization is also planning events exclusively for certificate holders, economic and market outlook, and other networking opportunities.

The DACFP has become the official blockchain and digital asset education partner for the CFP Board, XY Planning Network, Money Management Institute, Investment Advisor Association, Financial Planning Association and the National Association of Personal Financial Planners, according to Edelman.

“These organizations provide substantial amounts of educational content, but don’t have content in the crypto space,” said Edelman. “They’re turning to us because we have the expertise that allows them to provide this content to their membership without them having to reinvent the wheel.”

The DACFP course costs $549, Edelman said.

“We have partnerships with other organizations where we provide discounts for memberships,” said Edelman. “Advisors should talk to their employers to see if there are discounts available.”