Cryptocurrency, Financial Planners/Advisors, and Client Expectations

CFP® Certificants in the News

Cryptocurrency was considered a highly speculative, if not a suspiciously bizarre novelty, when Bitcoin was introduced anonymously in 2009. Fast forward to today – Cryptocurrency and other digital assets have skyrocketed in popularity. For example, Bitcoin holdings alone in 2021 are estimated at over one trillion dollars, and the federal government is studying the need for an oversight agency.

What does this trend mean to CFP® Certificants? The answer is found in the Board's June 14, 2021 article entitled The Rise of Digital Assets: Understanding This Emerging Asset Class. Crucial excerpts follow:

In a survey published in March 2021…more than 9 in 10 investors (92%) expect their financial advisors to be able to give them advice about bitcoin.

"In a survey published in March 2021, New York Digital Investment Group (NYDIG) found that more than 9 in 10 investors (92%) expect their financial advisors to be able to give them advice about bitcoin. A separate study conducted by Bitwise in 2019 noted that 76% of financial advisors had received questions from their clients about digital assets.

Institutional attitudes have shifted as well. Goldman Sachs and Morgan Stanley recently announced they will be offering access to Bitcoin for their wealth management clients. On the market infrastructure side, top financial institutions have established themselves as major players in the digital assets space. Fidelity, for example, entered the space seven years ago to do research and development on blockchain technology and, in 2018, launched an institutional custody and trade execution platform called Fidelity Digital Assets. BNY Mellon announced earlier this year that it is developing the industry's first multi-asset digital custody and administration platform for traditional and digital assets.

As the digital assets community awaits potential SEC approval of a bitcoin ETF, the deck is already set for wide-scale adoption of the asset class. Financial planners need to be ready."

We will add a caveat to the preceding excerpt - Cryptocurrency offers the potential for outsized returns for those investors willing to accept sobering risks.