Merrill warns about crypto as financial advice industry warms to digital assets

An increasing number of financial advisors appear to be investing more client assets into high-risk digital currencies, while one of the industry’s leading brokerages and wealth management businesses, Merrill Lynch, is sounding a warning about such assets.

That’s the two-headed approach of the financial advice industry as it attempts to solve the puzzle of crypto investing: satisfying clients who want to invest in digital assets, with the firm hanging onto those assets, and managing investors’ exposure to the high-risk asset class that’s in line with traditional industry standard of care practices.

Demand for digital assets from retail investors is likely to keep increasing. Roughly one-third, 32%, of financial advisors invested in crypto for client accounts in 2025, up from 22% in 2024, according to the Bitwise/VettaFi 2026 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets.

It’s the highest allocation in the eight-year history of the survey, which included responses from 299 financial advisors from a variety of business and employment models.

More professional advisors own crypto than ever before, according to the survey, with 56% of advisors reported owning crypto in their personal portfolios, marking the highest level of ownership since the survey began in 2018.

And institutional access is on the rise. According to the survey, 42% of advisors said they are able to buy crypto in client accounts, a significant increase from 35% in 2024 and 19% in 2023.

That should not come as a surprise.

Leading financial advice companies continue to broaden access for clients to include cryptocurrency assets in their portfolios.

Bank of America said last month it was 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.

Formerly, qualified Bank of America clients right could buy firm approved crypto exchange-traded funds; what’s new is that the bank’s advisors can recommend the products.

Meanwhile, Merrill Lynch this month sounded the alarm bell to advisors and clients who are considering buying and investing in digital assets, according to new disclosure from the firm.

“The risks related to an investment in crypto assets are significant,” according to the updated wrap fee program brochure on file with the Securities and Exchange Commission for Merrill Lynch’s Investment Advisory Program. “Crypto assets are highly speculative and have been in existence for only a short period of time.”

“A significant portion of the demand for crypto assets is generated by speculators and investors seeking to profit from short-term holdings,” according to the SEC filing. “Media headlines, tweets, or influencers’ opinions can significantly influence performance given the speculative nature of cryptocurrency.”

“Historical prices of crypto assets have been extremely volatile,” according to the filing. “Crypto asset prices can decline rapidly, and investors can lose their entire investment within a short period. Some crypto assets have concentrated ownership or a number of large holders, who may cause unexpected price declines by selling or transferring their holdings without warning.”