U.S. investors not using advisors for crypto: report

Many U.S. investors who have financial advisors aren’t using them for crypto investments, a report from Javelin says.

According to the report, among the 753 “advised investors” surveyed (meaning those who maintain an advisory relationship with a wealth manager) 28% are trading crypto via platforms such as Coinbase and Binance. Nearly half of these advised investors have a self-directed brokerage account.

While advisors south of the border can purchase crypto products for their clients, some advisors are using pooled products for clients to get indirect exposure to the digital asset, the report noted. However, these products are expensive as the cost is driven by active fund management and the need to use derivatives to manage crypto exposure, it said.

“Aside from the product cost, investors actually enjoy participating in the mythos of bitcoin by holding currency directly,” the report stated. “Wealth managers that can offer direct crypto ownership to advised investors and add value through a broader portfolio management and planning strategy will win market share.”

To win market share, advisors should prioritize digital asset education, the report noted. Firms’ technology providers can also partner with exchanges to provide their clients access to digital assets, like BlackRock did with Coinbase in August.

Insights and findings from the report were based on Javelin’s 2022 investor survey, which had a total sample size of 1,538 investors.