Half of advisors plan to recommend cryptocurrency investments to their clients within the next 12 months, according to a March survey by the Digital Asset Council of Financial Professionals, the organization that connects the financial services industry with the digital asset community.
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 at an unprecedented rate, thanks to both launch of spot bitcoin ETFswhich makes investing in bitcoin easier than ever and the rapid rise in the price of bitcoin over the past 18 months,” DACFP founder Ric Edelman wrote in an email.
He added that advisors who do not include crypto in client portfolios are not maximizing their investment potential.
Of those advisors who asked their clients if they owned crypto assets, 92% had some clients who had already invested. Additionally, 39% of advisors said 10% to 49% of clients own digital assets.
However, in March, only 34% of advisors surveyed recommended crypto to their clients, likely because firms need more time to incorporate new guidelines around spot bitcoin ETF, suggested DACFP. In December 2023, the share of advisors recommending crypto was 59%.
A majority of advisors (31%) recommend that clients allocate 2% of their portfolio to crypto, another 19% recommend a 5% allocation, and 15% of advisors recommend a 1% allocation. Another 8% of advisors recommend splitting between 10% and 14%.
Among advisors who do not recommend 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 responses from 272 professionals. Financial advisors working at independent RIA firms accounted for 71% of respondents, while 19% of respondents worked at brokerage firms, 2% at wire, and the rest from other types of companies in the financial services industry. The majority (65%) work with clients with assets between $500,000 and $3.5 million. Eighty-six percent of respondents had more than 10 years of industry experience.