Despite advisers having remained cautious of crypto assets, the shift to embrace crypto as an investment vehicle for clients throughout the next year is on the rise.
In fact, more than a quarter (26%) of advisers indicated that they plan to increase their use or recommendation of cryptocurrencies over the next 12 months, according to the 529 respondents to the Financial Planning Association’s 2021 Trends in Investing Survey conducted by the Journal of Financial Planning and supported by Onramp Invest. By comparison, zero respondents said they would increase their use or recommendation of crypto in 2020.
Client demand is a huge driver, as 49% of advisers indicated that clients had asked them about investing in cryptocurrencies in the last six months, up from 17% in 2020, according to the survey. However in 2021, 28% of advisers still said the asset is a “gamble,” up from 24% in 2018, according to the survey.
“It is clear from these results that we’ve reached an inflection point in the wealth management space,” said Tyrone Ross, CEO of Onramp Invest. “Advisers are now faced with a client base that demands knowledge, access and advice from their adviser on crypto assets.”
Cryptocurrencies were first added to the FPA survey in 2018, when only 1.4% of advisers indicated they were currently using or recommending cryptocurrencies with clients. That percentage dropped to below 1% in both 2019 and 2020. In 2021, 15% said they currently use or recommend cryptocurrencies with their clients.
“With most of the public poorly informed about what digital assets are, I find it comforting that more financial advisers are involved in conversations about the topic and the role such assets should or should not have in clients’ portfolios,” said Dan Moisand, practitioner editor of the Journal of Financial Planning.
In terms of education on crypto, 48% of respondents say they read news stories on cryptocurrencies and are somewhat comfortable conversing about the topic, 33% actively educate themselves on cryptocurrencies and are comfortable conversing about the topic, and 4% say they don’t know anything about cryptocurrencies and don’t talk about them with their clients.
In addition, more than half of respondents (52%) had not personally invested in cryptocurrencies, whereas 48% did.
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