45% of Surveyed US Financial Advisors Expect to Use Crypto Per Clients’ Request

Adoption Cryptocurrency Financial Services Investing Survey

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Jaroslaw Adamowski

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Jaroslaw Adamowski

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June 26, 2023 06:54 EDT

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About 45% of surveyed US financial advisors say they expect to use crypto in the future in response to client requests, according to a recent report released by financial research and consulting firm Cerulli Associates. However, 7% declare they currently use such assets based on their own recommendations, and 10% use them due to client requests. 

According to Cerulli Associates’ report,

“Expectations of use over the next two years are much higher at 24% willing to use cryptocurrency by client request […].”

It further adds, however, that,

Still, only 31% of advisors say they expect to be recommending cryptocurrency use in client portfolios at any point in the future.” 

Financial advisors are hesitant to promote crypto among their customers despite the fact that investors are showing increasing interest in exposure to these assets, with 80% of advisors admitting clients have asked them about crypto, the firm said.

In comparison, 94% of surveyed 600 financial advisors in the US received questions from clients about crypto in 2021, up from 81% the year before, according to the Bitwise/ETF Trends 2022 Benchmark Survey.

Per Cerulli Associates, last year, private equity comprised 20.9% of advisors’ alternative asset distributions. In comparison, crypto accounted for a meager 2.3% the same year, as indicated by data collected by the research and consulting firm.

For 2023, advisors expect to raise crypto exposure, but it will remain at a relatively low level, at 2.5%. The firm argues that, over time, financial advisors will become less reluctant to increase their customers’ exposure to cryptoassets.

Cerulli Associates added that,

“Top-tier exchanges will surely prioritize security to protect their clients’ personal information. Meanwhile, investor protection from hacking is similar to any other credential protection, where use of strong passwords and two-factor authentication are crucial steps in prevention of theft.”

At the same time, the “wariness of advisors to enter the space should be relieved over time as regulation and security improve,” the report said, adding that security concerns are often a result of headlines regarding crypto wallet hacks and data breaches at exchanges.

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