The surveyed financial advisors revealed that 19% of respondents held crypto in their personal portfolios, with RIAs more likely to own crypto than other managers. While 19% of advisors said they owned crypto in their personal portfolios, only 9% of advisors in allocated crypto to client portfolios.
Looking ahead, 22% of advisors expect to include crypto in client portfolios by the end of 2019, and all advisors with allocations expect to retain those positions this year, while an additional 13% intend to raise allocations from zero.
More investors are taking an interest in cryptoassets. Over the past year, 79% of all advisors received questions about crypto assets. Among financial advisors, 44% of surveyed respondents said between 1% and 5% of clients asked questions about crypto in the past year while 2% reported receiving questions from a majority of clients.
The survey also found that individual investors have been independently looking into crypto without their advisors’ help. One-third of all advisors said that they knew that clients were investing in crypto outside of the advisory relationship, and a further 32% said that they weren’t sure and thought it could be the case.
Surveyed advisors revealed that low or non-correlated returns with other assets was the most popular reason to include cryptoassets in a portfolio, followed by high potential returns, something new to offer clients and clients asking about it. The majority of respondents also categorized cryptos as a form of alternative asset sleeve.
Despite the growing buzz, the advisors had a large number of concerns when asked what was preventing them from investing in crypto, or from increasing their exposure, with no idea how to value cryptocurrencies topping the list of worries, followed by regulatory concerns, volatility, lack of an easily accessible investment vehicle like ETFs or funds, and custody concerns. However, advisors said that they would be more comfortable if the market experienced better regulation, had better custodial solutions, provided better product education and offered an ETF investment vehicle. Advisors overwhelmingly preferred ETFs over other investment vehicles when asked hwo they would invest in cryptos, with 58% pointing to this fund vehicle.
Financial advisors who are interested in learning more about the cryptocurrency market can watch the webcast here on demand.