SEC custody rule could raise costs for smaller advisers, CryptoSlate says

A proposed U.S. SEC rule allowing investment advisers to directly hold clients’ crypto when a qualified custodian is unavailable could put smaller advisers at a disadvantage because of higher costs, CryptoSlate reported. Citing the SEC’s economic analysis, the outlet said annual costs for advisers adopting the approach were estimated at about $433,833. It added the estimate did not include technology infrastructure buildout costs and other potentially significant expenses. As a result, smaller advisers may opt not to offer the service because of the cost burden, while larger advisers could be relatively better positioned by spreading costs across more clients and assets. The report added those costs could also be passed on through client fees, potentially raising the cost of using the service.