Personal Finance Advisors Caught Flat-Footed By
Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Boom
Personal Finance Advisors Caught Flat-Footed By Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Boom
Amid rising demand from clients, personal finance advisors who don’t use or
discuss Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin may risk losing business• Экономика » Бизнес, analysts say.
By Peter Saalfield
Nov 17, 2024 Nov 17, 2024
5 min read
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Despite surging interest among retail investors, most financial advisors
remain unwilling or unable to handle crypto-related requests from clients,
several advisors and analysts told Decrypt .
“I talk with other financial planners all the time—99.99% of them vehemently
disagree with me,” said Jim Crider, a Texas-based certified financial planner
who often recommends Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin to his clients. “They think Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin is tulips and
Beanie Babies, and absolutely worthless.”
This skepticism could present a problem for the financial advisor industry. If
demand from main street keeps growing—with Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin repeatedly breaking
all-time high price marks lately and other cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта surging
alongside—then advisors who don’t use or discuss crypto may risk losing
clients.
“If you’re an advisor that is not able to offer it and not able to talk about
it, then they might seek somebody who is willing to,” said Matt Apkarian,
associate director of product development at research and consulting firm
Cerulli Associates, who has studied the financial advisor industry.
Although most analysts agree that retail has played a smaller role in the
current bull market than in previous cycles, several advisors told Decrypt
that they have recently seen a significant bump in interest.
“I would say this year, and especially this past week with the surge in the
crypto market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта, we have seen more requests than ever,” said Jonathan Barrett of
New Jersey-based Barrett Financial Advisors.
“When it was a budding alternative asset class, many people hadn’t heard of it
and were very skeptical,” he added. “But the idea of a decentralized currency
is becoming more and more common, and interest has spiked.”
Retail enthusiasm appears to have grown since Election Day. Commonly cited
indicators, like the number of Google• Объект организация » Организации по алфавиту » Организации на Go » Google (компания) searches for crypto-related terms and
the App Store ranking of the Coinbase app (among other crypto apps) have
skyrocketed.
“Retail is jumping in,” said Tucson-based certified financial planner Theresa
Morrison. “I wouldn't say the last movement in price was a result of
retail, but that’s where it creates the interest and that’s where they then
start to come in.”
Morrison and Crider are members of the Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Financial Advisors Network , a
group of “orange-pilled” financial planners who market themselves to investors
with a “desire and commitment to include Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin” in their financial plans.
Crider said there are only a handful of advisors in the country who are
Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin bulls.
“There’s literally like six advisors like me in the nation," Crider said, "and
I’m friends with all of them."
Recent research shows that a large majority of financial planners do not
recommend or discuss cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта with their clients. In July, Cerulli
Associates published a survey of 1,500 financial planners showing that only
2.6% had recommended crypto investments to clients, and just 13.7% had ever
used or discussed crypto with clients.
A January survey by Bitwise/VettaFi found that only 11% of advisors had
allocated crypto in customer accounts, despite 88% having fielded a
crypto-related question over the previous year.
This is partly because many financial planners are affiliated with large
institutions that have blanket prohibitions against discussing or recommending
crypto. In August, Morgan Stanley• Объект организация » Организации по алфавиту » Организации на Mo » Morgan Stanley broke with other Wall Street giants in
permitting its advisors to pitch BlackRock’s iShares Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Trust and
Fidelity’s Wise Origin Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Fund to individuals with a net worth of more
than $1.5 million.
Advisors may also be reluctant to recommend crypto because of the complexity
of the technology, said Alex Shahidi, managing partner and co-chief investment
officer at independent wealth advisory firm Evoke Advisors.
“There’s a steep learning curve,” Shahidi said. “It's a new technology.
It’s a new concept.”
“At some point, it hits a tipping point where it’s a big enough deal that you
should invest the time to educate yourself,” he added. “That doesn’t mean
you're going to be for it or against it, but at least you want to move up
the learning curve.”
Many advisors also remain skeptical that crypto will ever provide real-world
utility.
“There are still plenty of people that still think it’s a Ponzi scheme and
it’s completely going to zero,” said Apkarian. He pointed to Cerulli’s 2023
survey, which asked advisors who do not use crypto or discuss it with clients
for the reasoning behind their position. The most common answer was that they
do not “consider it suitable for inclusion in portfolios,” he said.
But amid rising demand, some independent advisors have softened their
position, at least on Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin.
“I do think Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin has some potential,” said Charles Zhang of Zhang
Financial, who Barron’s ranked the top independent wealth advisor in the
country in 2024, 2023, and 2021. Zhang noted that he was expressing his
opinion and does not typically make financial predictions.
Zhang advises clients who have at least $1 million in their account to invest
no more than 1% of their portfolios in Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin, but to avoid other
cryptocurrencies• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта.
“Every client has a different risk level,” he said. “If you’re a risk taker
and you add Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin as part of diversification, that’s understandable. But
some people are very conservative, and maybe they should just buy gold.”
Zhang expects demand for Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin to increase in the long term as it continues
to gain legitimacy, pointing to the ETF approval and reduced regulatory risk
as positive signs.
It will also get a significant boost when more of his colleagues come to
embrace it, he added.
“Once advisors feel comfortable and involved," Zhang said, "that will totally
change the game."
Edited by Andrew Hayward
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