Approximately 39% of clients have asked their advisors about cryptocurrency investments, but overall investor interest is limited and declining. Only 14% of investors surveyed in March and April 2022 indicate that they would be very likely to add crypto to their portfolio if their wealth management firm offered it, with 21% being somewhat likely to do so. With investor demand having further eroded since the research was conducted, wealth management firms don’t need to be in any hurry to offer cryptocurrency in the near future.
New research from MMI and Aon in the third report of their 2022 Advisory Solutions: Expectations and Experiences series examines the risks and opportunities for wealth managers in cryptocurrencies and cybersecurity from the perspective of both investors and advisors. The report provides key takeaways and action steps for wealth managers to consider in evaluating the rapidly-evolving crypto space.
Among the study’s key findings:
- The strongest interest in cryptocurrencies continues to come from investors below age 35. 80% of investors under 35 hold some form of digital asset. 52% of them hold at least 60% of their portfolio in cryptocurrency, with men being twice as likely as women to invest in crypto.
- 42% of advisors claim to have expert knowledge of cryptocurrency, with an equal proportion believing that their firm should offer it to their clients.
- High growth and return potential were the most cited benefit of crypto investing, while market volatility was identified as the greatest risk, followed by cybersecurity and lack of inherent value. Moving forward, a clear regulatory framework for cryptocurrencies will be a prerequisite for improving the appeal of this asset class to investors.
- Investors who have confidence in their wealth management firm’s cybersecurity are almost three times more likely to be very satisfied with their overall wealth management experience. However, only 52% of investors indicate being highly confident in their wealth management firm’s cybersecurity.
Want to learn more?
Detailed findings from the 2022 Expectations and Experiences research have been released in a series of three reports:
Download Part 1: Emerging Retirement Planning Gaps in a Post-Pandemic World
Download Part 2: Improving the Digital Experience Through Simplification and Personalization
Download Part 3: Examining Risks and Opportunities for Wealth Managers in Cryptocurrencies and Cybersecurity
Listen to the MMI Webinar with Peter Keuls and Basel Raslan of Aon summarizing key findings from the 2022 research. For further information, please contact MMI at (646) 868-8500 or events@mminst.org.
