Vast majority of financial advisers discuss crypto with clients, says study

A new study shows that while two-thirds of financial advisers have discussed crypto or digital assets with their clients in the past year, not much action has followed.

Only 15% of more than 600 advisers in the study conducted by Coalition Greenwich, a global provider of strategic benchmarking, analytics and insights to the financial services industry, had created a strategy or offered products involving bitcoin or digital assets to retail investors.

Behind this reticence were 32% of respondents who said their firm’s policies would not allow it, 26% who said it was not suitable for their clients, 15% said they had not but expected to in the next year and 13% who said they lacked the tools to do so. The total does not equal 100% because of rounding.

Those who are offering crypto options are doing so via products including the Grayscale Bitcoin Trust, NYDIG, Bitwise 10 Crypto Index Fund (BITW) and separately managed accounts, primarily to accredited investors.

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The study also pointed out that the last year has seen movement toward crypto for retirement, with numerous bitcoin IRA companies now operating, including Bitcoin IRA, AltoIRA, iTrustCapital and Coin IRA. Still, it noted that bitcoin in employer 401(k) plans seems some way off.

The lack of crypto exposure might also be tied to the lack of a spot bitcoin ETF, which the Securities and Exchange Commission has yet to approve. About 80% of financial advisers supported the creation of spot bitcoin and other currency-tracking exchange-traded funds (ETFs), the study showed, based on 530 respondents. The SEC has rejected such proposals in the past.

“Such an ETF would likely bring billions in retail investor assets into Bitcoin that currently sit on the sidelines,” the authors of the study said. An SEC-approved spot bitcoin ETF would leave 32% of the advisers more willing to suggest cryptocurrencies in asset allocation strategies when appropriate.

The study concluded that “more regulatory clarity, more regulated investment vehicles and technology enabling easier access will likely set the stage for increased crypto-asset allocations in the coming year.”