Registered Investment Advisors (RIAs) operate in a dynamic and ever-changing financial landscape, where efficient and strategic trading practices are crucial for optimizing client portfolios. Block trading, a valuable tool for RIAs, has numerous benefits that bring ease to advisors’ everyday practice, including time savings, increased efficiency, and more equality across client trades.
How does block trading make advisors’ lives easier?
Here are a few ways block trading helps RIAs better serve their clients and stay competitive in an evolving market:
1. Enhanced efficiency: Block trading allows advisors to buy or sell a significant number of shares in a single transaction, streamlining the trading process and minimizing the impact on market prices. This efficiency is especially beneficial for RIAs managing portfolios with substantial assets, as it helps avoid market disruption and potential slippage associated with breaking down large orders into smaller ones.
2. Cost savings: By consolidating orders into larger blocks, advisors can benefit from reduced transaction costs per share. This cost efficiency is particularly relevant in markets where transaction fees can significantly impact overall portfolio performance. Additionally, block trading can result in lower market impact costs, as executing fewer, larger trades generally has a smaller impact on market prices compared to numerous smaller transactions.
3. Liquidity access: Advisors often face the challenge of managing large portfolios with illiquid assets. Block trading provides an avenue for accessing liquidity in markets with limited trading activity. By combining orders into sizable blocks, RIAs can tap into deeper liquidity pools, ensuring smoother execution and minimizing the impact of trading on the market. This becomes especially important when dealing with less liquid investments, such as certain fixed-income securities or small-cap stocks.
4. Portfolio customization: Block trading enables RIAs to tailor their trading strategies to meet specific portfolio objectives. Advisors can efficiently adjust the size and timing of block trades based on their client’s unique investment goals and risk tolerance. This flexibility allows RIAs to implement portfolio adjustments seamlessly, whether rebalancing allocations, adjusting sector exposure, or making tactical asset allocation shifts.
5. Transparency and fast, easy reporting: The consolidation of trades and equalizing of cost across all trades in the block allows for straight-forward reporting. In the instance of block trades, it could be said that one performance report fits all, saving advisors time.
Block trading for alternative assets
A large part of making the digital asset market accessible for advisors and their clients is making sure they can access and apply the tools they know and need from the traditional finance world to crypto. That’s why we made it our mission to implement block trading for RIAs, and now, advisors can execute block trades across a wide variety of digital assets, from bitcoin to Ethereum and more.
Get started with Onramp.