Make sure your salted butter and cream cheese are at room temperature to help them blend together smoothly.
In a mixing bowl, combine the softened butter and cream cheese. Beat on medium speed until smooth and creamy, about 2-3 minutes.
With the mixer on low speed, gradually add the powdered sugar to prevent a sugar cloud. Once incorporated, increase speed to medium and beat until smooth.
Add the canned cream of coconut and vanilla extract. Beat on medium speed until well combined and fluffy. Add coconut milk if too thick.
Taste your frosting and adjust sweetness with more powdered sugar or a pinch of salt if necessary.
If using toasted coconut, sprinkle it on top of your frosted desserts or mix it into the frosting for added texture.