Per an article published by Financial Times, the demand for cryptocurrency is putting many private wealth professionals in tricky positions. Many early Bitcoin investors have realized massive gains through the years, which is tantalizing for high net worth investors (HNWIs). Despite this, cryptocurrency can be a volatile investment fraught with risk, and many private wealth professionals are struggling to keep their clients happy.

Gaining Ground

A 2020 deVere survey of about 700 HNWIs around the world found that roughly 73% already owned or were interested in owning cryptocurrency by the end of 2022, up from 68% just the year before. Another survey by deVere pointed out that about 80% of millionaires have asked their private wealth management firms about cryptocurrency. Furthemore, some of the world’s biggest legacy institutions offer cryptocurrency investing solutions, including JPMorgan, Fidelity, and many others. Cryptocurrency is gaining ground, and private wealth professionals are seeing a massive uptick in the number of clients who are interested in taking the plunge.

The Crypto Rabbithole

Private wealth professionals have one ultimate goal: to help their clients gain wealth with minimal (or at least manageable) risk. Most HNWIs invest in a broad range of assets, ranging from stocks and bonds to real estate and from government bonds to IRAs. In the last decade, well-known individuals like Elon Musk, Ashton Kutcher, and Richard Branson have pushed cryptocurrency into the limelight, and more HNWIs than ever before have found themselves going down the crypto rabbithole. This interest has put many private wealth professionals in a precarious position due to crypto’s inherent volatility.

The Case for Digital Currency

The US government continues to entertain the idea of a digital dollar, which has driven interest in cryptocurrency even higher. As of 2023, the Central Bank Digital Currency (CBDC) is still in negotiation, but many finance experts believe it will become a reality in the near future. Private wealth professionals who are inundated with demand for cryptocurrency say their clients’ interest stems primarily from these negotiations and the success of Bitcoin.

Strategies for Private Wealth Professionals

Private wealth professionals who are being overwhelmed by their clients’ requests for cryptocurrency are ultimately at the mercy of their clients’ wishes. Moving millions of dollars from a fairly conservative portfolio into a highly volatile cryptocurrency creates severe anxiety, especially among those who have worked with their clients for decades. Good porfolios are a mix of risk and conservative assets with fairly predictable gains, but it is ultimately up to HNWIs the way they see fit. Professionals should stay in the know about the latest cryptocurrencies and keep up with the government’s talks about CBDC in order to facilitate their clients’ wishes.

Private wealth professionals who are knowledgeable about cryptocurrencies are in extremely high demand at top global firms. The ability to balance the incredible interest in digital funds with careful risk management - and the ability to help HNWIs understand that risk - is a vital skill that will carry professionals through their careers.

The Anderson Search Group
https://www.andersonsearch.com/
P.O. Box 700, Ada, MI 49301

Our firm specializes in placing elite talent and top performers in the commercial banking and private wealth commercial banking recruiting. We have cultivated relationships with the most talented players in the field: commercial banking and private wealth executives who have proven track records for building top revenue generating portfolios of business and deep centers of influence in their respective markets. We are expert at identifying the types of market leaders and producers who can make an immediate impact in our clients’ organizations