A recent survey of advisors by the Digital Assets Council of Financial Professionals indicates a gradual but certain increase of financial advisors recommending cryptocurrency investments to their clients.
The June 2024 Advisor Pulse Survey, sponsored by Franklin Templeton Digital Assets, found that 40 percent of advisors have advised at least half of their clients to consider cryptocurrency, a notable increase from 32 percent in March 2024.
The survey polled 584 financial professionals, including seven-tenths (68 percent) who are affiliated with independent RIA firms, who predominantly serve clients with assets between $500,000 and $3.5 million. A significant 85 percent have over a decade of experience in the financial services industry, including 60 percent who were 20-year veterans or more.
The forward momentum in crypto engagement among advisors coincides with the introduction of spot bitcoin exchange-traded products in the US earlier this year.
Between its previous March survey and the latest snapshot taken in June, DACFP said the number of advisors recommending crypto allocations across all client portfolios nearly doubled, from 8 percent to 13 percent.
"The availability of spot bitcoin ETPs is clearly driving increased advisor engagement with crypto," said Ric Edelman, founder of DACFP, in a statement revealing the June findings. "This data underscores the urgent need for advisors to enhance their digital asset knowledge to effectively serve their evolving client base."
With bitcoin still as volatile as ever, advisors continue to be cautious on crypto. The most common recommendation, shared by one in four advisors polled by DACFP, calls for a portfolio allocation of 2 percent, in line with earlier findings from March.
In June, 88 percent of advisors said they recommend clients allocate between 1 percent and 5 percent of their assets to cryptocurrency, nearly flat from 87 percent earlier this year.
Advisor recommendations may accelerate even more rapidly given recent developments over the summer, including Morgan Stanley allowing its advisors to pitch bitcoin ETFs early this month and the SEC’s sign-off on ether ETFs in July, though those crypto ETFs may be less appealing to advisors.
Still, advisors who have yet to recommend crypto are showing increased interest, with 56 percent of the June poll participants planning to do so in the future. Of these, 40 percent intend to start within the next six months, up from 35 percent in March.
"The introduction of new products like spot crypto ETPs emphasizes the need for advisors to partner with firms capable of providing the guidance and education required to navigate the rapidly developing market," said Sandy Kaul, head of digital asset and industry advisory services at Franklin Templeton.
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