The Digital Asset Dilemma: A Growing Client Expectation

As cryptocurrency continues to mature beyond its speculative roots, financial advisors are increasingly faced with a pivotal question: Should digital assets be part of client conversations—and portfolios? With institutional adoption rising, regulatory clarity slowly emerging, and investor interest staying strong, the pressure is building for advisors to offer informed guidance on crypto.

According to a 2025 Fidelity Digital Assets survey, over 60% of high-net-worth individuals and nearly 75% of Millennials and Gen Z investors now express interest in digital assets. Yet, only about 25% of financial advisors feel confident in their ability to advise on them.

What’s Driving the Shift?

Several trends are converging to make crypto more mainstream:

• Institutional Legitimacy: Major players like BlackRock, Fidelity, and Franklin Templeton are now offering Bitcoin ETFs and tokenized funds, bringing a layer of credibility and access to retail investors.
• Blockchain Integration in Finance: Tokenization of real-world assets and blockchain-based settlement systems are increasingly being used by traditional financial institutions.
• Demand for Diversification: Clients, particularly younger ones, are seeking portfolio diversification and inflation hedges—roles some believe crypto can play.

In short, crypto is no longer just a fringe investment; it’s part of a broader shift in how financial systems are evolving.

Compliance and Regulation: Proceed with Caution

Advisors must tread carefully. The SEC and FINRA have both reiterated that digital asset recommendations fall within regulatory scrutiny, particularly if tied to securities or certain custody arrangements. New guidance issued in early 2025 outlines that:

• Advisors must perform due diligence on any digital asset they discuss or recommend.
• Custody rules apply to crypto holdings in managed portfolios.
• Advisors must disclose compensation structures if recommending or referring crypto-related products.

Working with compliance teams and understanding how to document crypto-related discussions is essential.

Opportunities for Advisors

1. Education as a Service: Even if you don’t directly manage digital assets, educating clients on crypto basics, tax implications, and market risks can add value.
2. Tax Planning: Crypto tax rules remain complex. Advisors who help clients navigate wash sale rules, cost basis tracking, and capital gains from digital assets can significantly reduce financial friction.
3. Estate and Wealth Transfer: With digital assets included in more estate plans, advisors can play a key role in helping clients manage custody, access, and legacy planning for crypto holdings.
4. Portfolio Contextualization: Advisors can evaluate how digital assets fit within broader investment objectives, using tools like risk assessments and scenario planning.

Key Takeaways

• You don’t need to be a crypto evangelist to be a valuable resource.
• Understanding the basics and staying within compliance guidelines can set you apart as a trusted advisor in a rapidly evolving area.
• Whether or not you recommend digital assets, clients will increasingly expect you to have an informed opinion.

Final Thought

As digital assets become part of the broader investment conversation, financial advisors don’t have to dive headfirst into crypto. But ignoring it entirely may be the bigger risk. A balanced, well-informed approach will position advisors to meet growing client expectations while remaining aligned with their fiduciary responsibilities.