Leading financial advice companies continue to broaden access for clients to include cryptocurrency assets in their portfolios, with Bank of America this week approving a 1% to 4% advisor-endorsed allocation to certain digital assets beginning early next year for clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms.
Qualified Bank of America clients right now can buy firm approved crypto exchange-traded funds; what’s new is that the bank’s advisors can recommend the product.
That’s significant.
In securities industry parlance, a “solicited” trade is one a broker or advisors recommends to a customer. An “unsolicited” trade is a transaction initiated by the client.
“I’m still skeptical about cryptocurrency and Bitcoin,” said one senior industry executive who spoke privately about the matter to InvestmentNews. “What’s underlying it?”
Cryptocurrencies and Bitcoin are known for extreme volatility, so it remains a question whether Bank of America’s advisors will embrace selling such products. According to coinbase.com, the price Thursday for Bitcoin was above $92,100 after reaching a high of $126,000.
Bank of America and Merrill Lynch advisors, among the most profitable in the financial advice industry, starting January 5 can recommend four crypto ETFs covered internally by the chief investment officer: Bitwise Bitcoin ETF, with the ticker BITB; Grayscale Bitcoin Mini Trust, BTC; Fidelity Wise Origin Bitcoin Fund, FBTC; and iShares Bitcoin Trust, IBIT.
Bank of America’s guidance of an allocation of 1% to 4% is in range with others in the industry, sources noted.
Advisors will participate in training to be eligible.
"This update reflects growing client demand for access to digital assets," said Nancy Fahmy, head of Investment Solutions Group, in a statement. "By introducing Chief Investment Offie coverage, training and providing allocation guidance, we're equipping advisors with the tools needed to meet evolving client interest in an informed way."
“For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate. Said Chris Hyzy, Chief Investment Officer, in the statement. “Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks.”
In an early October note, Morgan Stanley's global investment committee provided investors and financial advisors with allocation parameters suggesting 2%-4% of their portfolio should be in crypto, which it described as a "speculative but increasingly popular asset class that many investors, but not all, will seek to explore."
And in December last year, BlackRock put forth a case for investors to allocate 1%-2% of their portfolio to bitcoin.
Saba pushed; the justices pushed back - and the SEC keeps the gavel.
Two restrictive covenants gone in one ruling - and the drafting flaw is everywhere.
Clients' everyday realities, anxieties, and aspirations naturally change as they go up the wealth scale – and that has profound implications for advisors helping them find what "enough" really means.
The RIA technology giant's new office features a fitness center, café and outdoor community spaces, including a beehive, picnic area and herb garden for over 100 employees.
Liquidity risk overtakes access as the top concern for E&Fs as private markets dominate portfolios.
As $84 trillion prepares to change hands, advisors who treat estate planning as peripheral are quietly building a sieve, not a book.
In volatile markets, the advisors who win aren't the ones with the best calls - they're the ones whose clients stay the course.
