What You Need to Know
- Twenty-six percent of advisors indicated they plan to increase their use or recommendations of cryptocurrencies.
- Nearly half of advisors said their clients are asking about crypto assets.
- The same percentage reported that clients are asking about the effect of tax changes on their portfolios.
More than a quarter of financial advisors (26%) participating in the FPA’s annual investing survey indicated that they plan to increase their use or recommendations of cryptocurrencies in client portfolios over the next 12 months, up from 14% a year ago.
Of the 529 respondents to the survey, 15% said they use or recommend cryptocurrencies to clients, compared with 1% a year ago.
“It is clear from these results that we’ve reached an inflection point in the wealth management space,” said Tyrone Ross, CEO of Onramp Invest, a technology company providing RIAs access to crypto assets, which helped conduct the survey along with the FPA and its Journal of Financial Planning. “Advisors are now faced with a client base that demands knowledge, access and advice from their advisor on crypto assets.”
Indeed, according to the survey, 49% of advisors indicated that clients have asked them about investing in cryptocurrencies this year, up from 17% in 2020. An equal percentage of clients asked about the effects of tax changes on their portfolio.
“Addressing tax concerns represents an opportunity for financial planners to be of great value to clients,” said Dan Moisand, certified financial planner and practitioner editor of the Journal of Financial Planning, in a statement. “Taxes are easily one of the largest expenses clients will pay in their lifetimes.”
President Joe Biden has proposed raising the marginal tax rate on high earners — $509,300 for married couples and $452,700 for single filers — from 37% to 39.6%, and raising the capital gains tax on individuals with adjusted gross incomes over $1 million from 23.8% to 43.4%.