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Financial advisors feel pull of cryptocurrency wave as more clients express interest

When the market was crashing in March 2020, financial advisor Ivory Johnson, founder of Delancey Wealth Management, decided it was time to introduce cryptocurrencies to his clients.

“I did it because I saw how active the Federal Reserve was and how much they were diluting the dollar,” which would be incredibly inflationary, Johnson said.

A recent survey from the Financial Planning Association and the Journal of Financial Planning shows that Johnson’s strategy could be part of a growing trend.

As investors become more interested in cryptocurrencies, financial advisors are feeling a new urgency to offer the investments to clients.

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About 49% of advisors said clients have asked about cryptocurrencies in the past six months, up from 17% in 2020, according to the survey.

More of these financial professionals — 26% — plan to increase how much they use and recommend cryptocurrencies in the next 12 months.

Currently, 14% of advisors are using or recommending those investments. That’s up from less than 1% in 2019 and 2020.

“Folks are realizing now that it’s not going away,” said Tyrone Ross, CEO of Onramp Invest, a provider of “cryptoasset” management technology for financial advisors. The company collaborated with the FPA and the Journal of Financial Planning on the survey.

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Advisors who don’t adapt could risk getting left behind.

“Clients are coming to advisors now knowing more than the advisors,” Ross said. “The advisors are absolutely terrified, because you never want to look dumb in front of your client.”

While Johnson said most advisors he talks to still aren’t familiar with cryptocurrencies, that could change as new certifications emerge and broker-dealers adopt technologies to handle these assets.

“Anytime something becomes increasingly adopted that the price increases exponentially, and we’re starting to see that with bitcoin, and other cryptocurrencies, and I think that’s another bull case,” Johnson said.

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