Morgan Stanley is expanding access to cryptocurrency investments for its wealth management clients, allowing financial advisors to pitch crypto funds to any client and in any type of account, including retirement accounts, starting October 15.
The move, confirmed by the firm on Friday, marks a significant shift from previous restrictions that limited crypto fund offerings to clients with at least $1.5 million in assets and an aggressive risk tolerance.
The change reported first by CNBC comes as the regulatory environment for digital assets in the US continues to evolve. The Securities and Exchange Commission’s recent approval of generic listing standards for spot crypto exchange-traded funds is expected to accelerate the launch of new crypto ETFs, broadening the range of digital currencies available to investors.
“Within the next 60 to 90 days, we’ll have a dozen or so new crypto-oriented products tracking things like solana or XRP, or the coins that people don’t know about that are below bitcoin and ethereum, the ones everybody knows,” said ETF expert David Nadig on CNBC’s “ETF Edge.”
Morgan Stanley, which oversees $8.2 trillion in client assets, has been steadily increasing its crypto offerings. Last month, the firm announced plans to enable trading of bitcoin, ether and solana at its E-Trade subsidiary.
As part of the latest policy update, the bank will use automated monitoring to ensure clients do not become overly concentrated in crypto, according to people familiar with the matter. The firm’s global investment committee recently recommended a maximum initial allocation to crypto of up to 4%, depending on client goals.
Lisa Shalett, chief investment officer for wealth management at Morgan Stanley, wrote in an October 1 report that the committee “considers cryptocurrency as a speculative and increasingly popular asset class that many investors, but not all, will seek to explore.”
For now, advisors at the firm are limited to offering bitcoin funds from BlackRock and Fidelity, though Morgan Stanley is monitoring the market for potential additions. With respect to retirement accounts, President Donald Trump's executive order opening the door to alternatives in 401(k)s is another tailwind for the push at the wirehouse.
It's worth asking whether advisors would actually be willing to make the pitches they're allowed to. A CoinShares survey report published in February found that 62% of advisors believe recommending speculative assets like bitcoin does not align with their legal obligation to act in a client’s best interest, and more than half worry about the impact on their professional relationships. On the other hand, 88% of advisors said the SEC’s approval of bitcoin and ethereum ETFs has made them more optimistic about digital assets.
Another CoinShares study in June found that 82% of wealthy investors would be more inclined to work with an advisor who offers crypto-related investment guidance. However, nearly one-third cited concerns about advisors’ credibility and transparency when it comes to digital assets.
“They’re looking for advisors who can serve as strategic partners, not product pushers,” said Jean-Marie Mognetti, CEO of CoinShares.
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