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Report: Half of Advisors to Recommend Crypto in the Next 12 Months

The introduction of bitcoin ETFs is fueling increased advisor engagement with digital assets, according to a Digital Assets Council of Financial Professionals survey.

Half of advisors plan to recommend cryptocurrency investments to their clients within the next 12 months, according to a March survey by the Digital Assets Council of Financial Professionals, the organization that connects the financial services industry with digital asset communities.

Thirty-five percent of advisors plan to start recommending crypto within six months, up 70% from a December 2023 survey. Franklin Templeton Digital Assets sponsored the survey.

“These latest survey results clearly show that financial advisors are actively engaging with crypto to an unprecedented degree, thanks to both the launch of the spot bitcoin ETFs, which makes investing in bitcoin easier than ever and the rapid rise in bitcoin’s price over the past 18 months,” wrote DACFP founder Ric Edelman in an email.

He added advisors not incorporating crypto in clients’ portfolios are not maximizing their investment potential.

Of those advisors who asked their clients if they owned crypto assets, 92% had some clients who have already invested. In addition, 39% of advisors said 10% to 49% of clients own digital assets.

However, in March, only 34% of surveyed advisors recommended crypto to their clients, likely because firms need more time to incorporate new guidance around spot bitcoin ETFs, DACFP suggested. In December 2023, the share of advisors recommending crypto stood at 59%.

A plurality of advisors (31%) recommend that clients allocate 2% of their portfolios to crypto, another 19% recommend an allocation of 5%, and 15% of advisors recommend a 1% allocation. Another 8% of advisors recommend allocating between 10% and 14%.

Among advisors who are not recommending crypto today but plan to start doing so in the future, 28% believe the ideal portfolio allocation is 5%. Another 23% of advisors said they would recommend an allocation of 1%, 15% said it should be 2%, while another 15% believe the ideal allocation is between 2.5% and 3%.

DACFP based its March survey results on answers from 272 professionals. Financial advisors working at independent RIA firms comprised 71% of the respondents, while 19% of respondents worked at brokerage firms, 2% at wirehouses, and the rest from other types of companies in the financial services industry. Most (65%) work with clients with between $500,000 and $3.5 million in assets. Eighty-six percent of respondents had more than 10 years of experience in the industry.

TAGS: ETFs Industry
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