Analysis: Despite growing retail interest, most financial advisors are still unwilling or unable to handle cryptocurrency-related requests

Despite the growing interest from retail investors, most financial advisors are still unwilling or unable to handle clients’ cryptocurrency-related requests, several advisors and analysts said. “I talk to other financial planners all the time — 99.99% of them strongly disagree with me,” said Jim Crider, a Texas-based certified financial planner who often recommends Bitcoin to clients. “They think it’s tulips and Beanie Babies and absolutely worthless.” And “if you’re an advisor who can’t offer or talk about it, then they’re probably looking for someone who will,” said Matt Apkarian, associate director of product development at Cerulli Associates, a research and consulting firm that studies the financial advisor industry. While most analysts agree that retail investors are playing a smaller role in the current bull market than in previous cycles, several advisors noted that they’ve seen a significant increase in interest recently. “I would say this year, especially in the past week, as the cryptocurrency market has risen, we’ve seen more requests than ever before,” said Jonathan Barrett of Barrett Financial Advisors in New Jersey. He added: “When it was still an emerging alternative asset class, many people hadn’t heard of it and were very skeptical, but the concept of decentralized currencies has become more common and interest has grown.” Morrison and Crider are members of the Bitcoin Financial Advisor Network, which markets itself to investors who “want and are committed to incorporating Bitcoin into their financial plans.” Crider said only a handful of advisors in the country are Bitcoin bulls. Recent studies have shown that the vast majority of financial planners do not recommend or discuss cryptocurrencies with their clients. In July, Cerulli Associates released a survey of 1,500 financial planners that showed only 2.6% had recommended cryptocurrency investments to clients, and only 13.7% had used or discussed cryptocurrencies with clients. Alex Shahidi, managing partner and co-chief investment officer of independent wealth advisory firm Evoke Advisors, said advisors may also be reluctant to recommend cryptocurrencies due to their complexity. "The learning curve is high. This is a new technology, a new concept. At some point, it will reach a critical point and become important enough that you should take the time to learn about it. This doesn't mean you will be for it or against it, but at least you want to increase the learning curve." "There are still a lot of people who think it's a Ponzi scheme and it will completely disappear," Apkarian said. He pointed out that Cerulli's 2023 survey asked advisors who do not use cryptocurrency or discuss cryptocurrency with clients why they hold this position, and the most common answer was "I don't think it's suitable to be included in the portfolio." (Decrypt)