Wealthy Young Investors Shift Allegiance: Are Financial Advisors Missing the Crypto Boat?

Are Financial Advisors at Risk of Being Left Behind?

Recent survey findings in the United States indicate that over a third of young, affluent investors have started moving away from financial advisors who do not offer cryptocurrency exposure. This significant shift puts pressure on money managers to rethink their digital asset strategies.

Survey Details and Significance

A survey by Zerohash, a crypto payments provider, of 500 US investors aged 18 to 40, revealed that 35% had moved money away from advisors who didn't offer access to crypto. Notably, those surveyed had incomes between $100,000 and $1 million, and more than half of those who switched advisors moved between $250,000 and $1 million.

Cryptocurrency Gaining Traction

Cryptocurrency has recently enjoyed a more favorable policy environment in the US. However, some wealth advisors are still catching up. Younger investors are typically less risk-averse compared to past generations and view crypto as a promising investment opportunity.

Increased Confidence in Crypto

Zerohash reported that over four-fifths of those surveyed said their confidence in crypto was boosted due to its adoption by major financial institutions such as BlackRock, Fidelity, and Morgan Stanley. This growing acceptance signals that cryptocurrency is becoming an integral part of the modern financial landscape.

Expansion of Crypto Holdings

The survey revealed that respondents with incomes exceeding $500,000 were leading this shift, with half having moved from advisors over crypto access. The survey also found that 84% of all respondents plan to increase their crypto holdings in the next year, with nearly half indicating they would significantly increase their allocations.

Call to Action for Financial Advisors

Zerohash suggests that these findings indicate that crypto "has become essential to modern portfolio strategy" and many wealthy investors "are not waiting for their private wealth managers to catch up." The company adds that "advisors who adapt early can strengthen client loyalty and capture new growth, while those who delay risk falling behind."

Investor Expectations

Zerohash emphasized that investors have clear expectations and want "insured, compliant crypto access." Based on the survey results, Zerohash offers a "playbook" for advisors to win investors, including offering crypto on "the same dashboard as traditional assets" with insured custody. It also notes that "investors expect more than Bitcoin and Ethereum," with 92% saying that "access to a broader range of digital assets is important."

Diversification of Investment Products

Meanwhile, asset managers have begun offering exchange-traded products (ETPs) with exposure to a wide range of cryptocurrencies, including products tied to altcoins such as Solana (SOL), XRP (XRP), and Dogecoin (DOGE). More novel products have featured staking, which rewards users for locking up tokens to secure a blockchain. Major issuer BlackRock is also seemingly set to offer staking exposure, with a filing for a staked Ether (ETH) exchange-traded fund in Delaware on Wednesday.