Almost 10% of US-Based Financial Advisors Bought Crypto for Their Clients in 2020: Survey

A recent report conducted by Bitwise and ETF trends concluded that the number of financial advisors who allocated funds to crypto-assets has increased by nearly 50% in a year.

Additionally, the percentage of investors expressing interest in purchasing digital assets has grown to 81%.

Financial Advisors Confirmed: Crypto Demand Is Rising

According to the 2020 study, financial advisors manage about half of the wealth of American investors and play a significant role in the distribution of funds. Consequently, the provider of index and beta crypto funds, Bitwise, and the ETF analysis monitor, ETF Trends, carry out yearly surveys among advisors to check their views on cryptocurrencies.

Most respondents were independent RIAs (45%), followed by independent broker-dealer reps (25%), financial planners (19%), and wirehouse reps (11%).

More than 80% of advisors reported that they had received at least one question from a client about cryptocurrencies in 2020. This is a slight increase from the 2019 results, where the number was 76%.

About three-quarters believed that their customers were allocating funds in crypto outside of their advisor relationship. Naturally, 26% were confident that the clients were not investing in digital assets yet.

Financial Advisors' Clients On Crypto. Source: BitWise
Financial Advisors’ Clients On Crypto. Source: Bitwise

Financial Advisors Warm Up To Crypto Investing

What’s even perhaps more bullish for the industry is that more and more financial advisors have started to purchase digital assets for their clients. Although still relatively low, the percentage has grown by 50% since 2019’s result of 6.3%.

“The percentage of financial advisors who report allocating in crypto in client accounts rose more than 50% last year, from 6.3% to 9.4%. Still, with less than 10% of advisors reporting allocations, this remains the domain of early adopters.” – reads the study.

The paper outlined that most of those who invested in crypto for their clients are independent RIAs. This could be expected to some extent as they face fewer restrictions regarding what types of investments to include in clients’ accounts.

In contrast, wirehouse representatives have reported the least amount allocated in crypto.

Despite the low percentage, 82% of the advisors that have invested for their clients have done the same for their personal accounts as well. 78% of them also plan to increase their cryptocurrency portfolio in the next 12 months, while 22% said they will “hold steady.”

The 2020 survey showed that most advisors listed “high potential returns” and “inflation hedging” as their most probable reasons to invest in crypto. Interestingly, the hedging argument had received only 9% of votes in 2019 while the percentage grew to 25% in 2020. This could be related to the fact that the US printed over 20% of all dollars in 2020, and the currency’s value started to depreciate.


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