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With bitcoin increasingly a mainstream asset, it’s not surprising that more clients are crypto-enthused and that interest and enthusiasm isn’t confined to specific income brackets or other demographic traits.
Advisors are aware that an increasing number of clients are crypto-interested, but knowing that is only half the battle. Financial professionals should also understand the extent to which their client bases are crypto-curious while accounting for some of the demographic factors germane to this asset class. Translation: Knowing what a client’s crypto motivations are is essential.
That’s especially true with affluent clients – a group that’s already expressing overt interest in asset classes beyond stocks and bonds. Advisors should expect that cryptocurrency is part of that conversation. After all, wealthy client tend to be savvy and while they are clients, they’re likely to be staying abreast of financial markets on their own, meaning many are likely to have at least a working knowledge of bitcoin and perhaps some other digital assets.
The other important point for advisors to acknowledge – it’s good news for fiduciaries – is rising interest in crypto is facilitating the need for more education and trusted advice. Add to that, wealthy clients are embracing those desires and they’re leaning on advisors for cryptocurrency guidance.
Wealthy Investors Want Advice, Expect Credibility
Obviously, the above sub-header is pertinent to any asset class, but rings loud and true regarding affluent clients’ expectations when it comes to cryptocurrency. A recent CoinShares survey confirms as much.
“Most investors are actively monitoring and managing their digital asset exposure and take pride in conducting their own research,” according to the asset manager. “However, many admit they’ve held back due to confusion or lack of reliable education. Despite their independence, they still place strong trust in advisors and want expert support in navigating the space. Investors want help understanding the fundamentals—like how digital assets fit into a portfolio and how to manage risk and taxes.”
When it comes to crypto success with clients, regardless of their wealth level, advisors need to put some work to master the two “C’s” – confidence and credibility. Initiative should also be part of that list because some wealthy clients feel as though their wealth managers simply aren’t bringing up cryptocurrency enough at a time when the asset class is more relevant than ever.
“Investors want advisors who can speak confidently about digital assets,” adds CoinShares. “Most say they’d prefer to work with an advisor who has crypto expertise—but many feel that advisors either don’t bring up such investments or lack the depth of knowledge needed. There’s a strong opportunity here for advisors to close that credibility gap.”
More Details on Wealth Clients’ Crypto Desires
Another marquee reason why advisors need crypto confidence and credibility for clients, including the wealthy, is because only a scant percentage of those in the high-net-worth stratosphere have no desire at all to be involved with crypto.
(Image Courtesy: CoinShares)
The cautiously confident, committed and curious categories drum up different advisor expectations, but these are demands wealth managers should meet with ease. For example, wealthy crypto-curious clients want fiduciaries to be proactive in initiating crypto discussions whereas those in the committed camp want a hands-on approach to informs and guides decision-making.
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