Tyrone Ross Jr. sat down with Benzinga's Chief Content Officer Brad Olesen in a multipart interview series to discuss how his financial planning firm, 401 Financial, is educating clients about cryptocurrency and Bitcoin BTC/USD and avoiding some of the pitfalls of the traditional financial advisory industry. He also made it clear where he stands when it comes to advising clients on how they should build a portfolio.
"What we really try to do is one, stop them from over-trading," Ross says with regards to how he advises clients in constructing how their assets are managed.
He invoked an anecdote in which there was one client he came across who had performed over 14,000 transactions. The "beauty" of 401's model, he said, i that it gives advice, and ultimately clients can make their own decisions. 401 doesn't benefit if you trade more or less – it's just advice that comes monthly compared to some advisors who could meet with clients as little as once or twice.
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401 Financial's name is borne from a former track coach who advised running 401 yards through the line — not just the 400. The origin story began following Tyrone's years at Bank of America Corp BAC-owned Merrill Lynch where he witnessed incredible success stories. The failings, specifically in accounting for crypto-related exposure, served to light the fire.
"I did realize there, though, when I was shown Bitcoin for the first time, I couldn’t unsee it." Despite those shortcomings, what left an indelible mark on Tyrone during his time at Merrill through 2016 was the "value" of financial planning. "That team did financial planning like I’ve never seen it to this day," Ross says.
But it's not all crypto, all the time for this financial advisor — despite the fact that he calls himself the "biggest crypto hippie you'll ever meet." While he considers traditional assets and stocks "dinosaur" bones, he adds, "if you want it (stocks), we give you exposure."
Among the assets he usually advises clients to pursue are some larger, broad market ETFs like the Vanguard S&P 500 ETF VOO and a bit of emerging markets depending on age and where they are in their lives.
He says the beauty of his advice-only model is that "we’re not trying to acquire your assets" or "sell you anything" so 401 can get you into the "lowest cost ever." Ultimately, clients often know what they're going to get with Ross given his open stance on cryptocurrency and specifically Bitcoin, he says.
Tyrone and his team want to educate as much as anything else, whether it's around dollar cost averaging or learning how to gain direct access to Bitcoin instead of buying into Bitcoin ETFs, trusts and derivatives like iShares Bitcoin Trust ETF IBIT, ProShares Bitcoin ETF BITO, Fidelity Wise Origin Bitcoin Fund FBTC or similar funds. "I don’t like the (crypto) ETFs, because, again, I think it’s a way to siphon fees on top of buying crypto."
401 has a message for those looking to start their financial journey: "We want to work with folks that have never worked with an advisor before. We don't have any minimums … and if you can't afford it, we'll take you on anyway until you can afford it. "
As Bitcoin crosses the $100,000 mark, and the crypto industry’s market value nears $4 trillion, it’s only more likely that those in the market for advisory services will require someone who speaks blockchain in its native tongue.
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Photo courtesy of 401 Financial.
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