Bitcoin surge catches personal finance advisors off-guard

The recent Bitcoin surge has caught personal finance advisors unwilling to adopt Bitcoin and other digital assets off-guard.

According to several finance experts and analysts, some advisors are still against their clients dipping their feet in the crypto sector. A research carried out by Cerulli Associates in July showed that out of 1,500 financial planners, only 2.6% told their clients about crypto, while only 13.7% had ever used crypto with their clients.

According to records, these advisors are vehemently against anything related to the crypto space and are unwilling to provide it to clients who ask. However, their unwillingness to provide crypto may cause problems in the industry. This is due to the demand for Bitcoin and other assets because of their performances, and advisors who refuse to recommend it may risk losing clients.

Financial advisors discuss Bitcoin’s potential

According to financial advisors, the adoption of Bitcoin has increased in the industry. This is because there are as many advisors willing to introduce their clients to Bitcoin, as they are those hesitant about it. “If you’re an advisor that is not able to offer it and not able to talk about it, then they might seek somebody willing to,” associate director of products at Cerulli Associates Matt Apkarian said.

One reason why advisors might be wary about introducing crypto is because of its real-world utility concerns. According to Apkarian, there are still advisors who view cryptocurrencies as a Ponzi scheme and they feel the assets may return to zero in the long run. He feels that way because of the most common answer to a survey question carried out by Cerulli Associates in 2023. When asked why they would not pitch crypto to their clients, their most common answer was that they do not need to add it to portfolios.

Retail interest predicted to trigger adoption

The consensus is that retail trading of these assets has contributed to its present surge, but there is an increase in advisors keen on bringing it to their clients. There has also been increased interest on the part of the clients, fuelled by the recent market-wide surge. With digital assets no longer seen as alternative investment tools, the idea behind decentralization appeals to more clients than before.

There has also been an uptick in retail adoption since the election day. Although these metrics cannot be measured, indicators like Google searches and app usage have increased since the period. According to financial planner Theresa Morrison, the recent surge cannot be attributed to only the retail traders, it is where the interest in these assets begins.

However, there is still a long way for retail interest to trigger adoption on a wider scale. Most financial planners are part of larger organizations with policies against discussing or introducing crypto to clients. In August, Morgan Stanley permitted its advisors to spot Bitcoin ETF investments to clients with a net worth of over $1.5 million.

With the recent demand for Bitcoin from clients, most advisors are looking in the way of the asset. According to Charles Zhang of Zhang Financials, Bitcoin has some potential. Zhang was ranked by Barron as the top wealth advisor in the United States in the last two years. However, he noted that it is what he feels and not financial advice. Zhang said that clients with more than $1 million may take the risk and invest 1% in Bitcoin, noting the need to avoid other digital assets.