Should you become a cryptocurrency financial advisor?

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As digital assets get more and more hyped, many wealth managers are wondering if they should expand their service offerings and become a cryptocurrency financial advisor. In this blog, I’ll talk about the questions you should consider if this is a decision you have on the table.

For those of you who are new to my blog/podcast, my name is Sara. I am a CFA® charterholder and I used to be a financial advisor. I have a weekly newsletter in which I talk about financial advisor lead generation topics which is best described as “fun and irreverent.” So please subscribe!

Sara Grillo, CFA is a highly fun and slightly crazy marketing consultant based in NYC.
I am an irreverent and fun marketing consultant for financial advisors.

Before we get started, I want to be clear that nothing in this podcast or blog can be interpreted as an investment recommendation of any type. I have no financial affiliation with any company mentioned in this podcast. Do your own research before investing and do not interpret anything in this blog or podcast to be a recommendation specific to you or any clients of yours. Also, nothing in this blog or podcast can be interpreted as legal or compliance advice.

Are there financial advisors for cryptocurrency?

Naaaat really.

At the time of the writing of this blog, October 2021, there are not many financial advisors for cryptocurrency. I know of one advisor, (maybe two) advising clients on investing in cryptocurrency.

Do financial advisors recommend Bitcoin? I haven’t heard of this happening yet. Why?

  • Investing in crypto through an ETF has only recently become possible. Most financial advisors simply can not add cryptocurrency to their clients’ portfolios, because there is no way to do so through their current firm’s infrastructure. Many advisors work through wirehouses or brokerage platforms with very strict regulations, and right now digital assets are not included on these platforms.
  • Moreover, most advisors don’t really understand digital assets. Some financial advisors aren’t that smart, and even if they were smart, it’s a new and complicated type of investment that confuses even intelligent people.
  • Financial advisors by nature are more conservative investors than the general public. They don’t own any of it themselves, and in fact most of them want nothing to do with it because they view digital assets as too speculative.

Can you be a crypto advisor?


I already answered that above.

The more meaningful question is, “should you be a crypto advisor?” I mean, in a “theoretically in the future” type of a thing.

The advantages from a financial advisor branding perspective are huge. Most financial advisors are viewed as the same. They talk the same, dress the same, and sell the same products. Any differences are miniscule. Claiming territory as a cryptocurrency financial advisor before it becomes “the cool thing” to be is a great way to claim market share and set yourself apart at the same time.

BUT this is a big responsibility and it must not be taken lightly. If you are contemplating this, ask yourself these questions.

Why do I want to become a crypto financial advisor?

It should be for the right reason. You should be doing this so that you can be an advocate, someone who provides an independent assessment of whether or not this investment is prudent for someone. It shouldn’t be because it’s a hot trend and it’ll be exciting and you can get all this attention and make alot of money.

There is alot of crap advice about crypto given by financial professionals who don’t have the client’s best interests in mind. Alot of people get into crypto not really knowing what is is they are investing in. The whole thing is senseless.

This is an opportunity to be a sensible advocate and to be the one who stands out by showing the truth and protecting people from bad decisions because there is a huge vulnerability here for retail investors who don’t have someone to show them this truth.

Who do I want to do business with?

As cryptocurrency is regarded as a volatile and speculative asset class, you are going to be hearing from a certain amount of investors who are looking for the next hot trend. They may not be looking for a long term relationship with a cryptocurrency financial advisor.

You know those annoying clients who think they’re Wall Street Traders? You know the adrenaline-pumping, CNBC-obsessed people who always want you to buy the next hot tech stock? You might be dealing with these types of folks. They tend to be very performance focused, and may hire you and fire you in a heartbeat. They may be jerks about it. Can you handle these shorter term relationships? Or would you just filter them out and refuse to take them on as clients? Figure out your stance.

It’s hard to know who you’d be advising about how to invest in crypto. At this point it’s not clear who will actually be needing advice for investing in cryptocurrency. This is such a popular trend right now. It’s not clear who wants to talk about it and who will be the ones to actually want to own crypto in their portfolios.

Can I take on this risk?

Higher risk, higher potential reward (as you know).

If you are in the position where you can not assume liability for managing speculative and volatile investments for your clients, don’t do it. Do you have sufficient legal support? You have to be okay with the uncertainty and the potential liabilities that could arise. If you aren’t, don’t do it.

How knowledgeable am I REALLY about cryptocurrencies?

I know many advisors who think they understand digital assets (when they really don’t). This is a precarious position to be in. You’ll have to become a cryptocurrency expert if you aren’t already, and you’ll have to keep refreshing your knowledge on a continual basis. If you aren’t up for the challenge, it’s not fair to your clients and you shouldn’t assume the role of being a cryptocurrency specialist.

Superficial knowledge is not okay here; you’ll have to become intimately familiar with all the nooks and crannies, from custody to taxation to how to trade it, etc.

Are you even investing in digital assets yourself?

Do you have the emotional energy and discipline to become (and remain) a true expert?

Be honest with yourself.

Does my platform support this (or are they likely to in the future?)

You’d have to ensure that your compliance team permits you to be involved with managing crypto assets for clients, and what the nature of that involvement would be. It’s too complicated to get into and I don’t know your situation, so the best thing would be to get total clarity from your platform (and get it in writing) to ensure you are complying with all regulations and platform guidelines.

How well-prepared am I to communicate with clients and handle their emotions if/when their positions go down?

It causes a great deal of chaos in a financial advisor’s practice when the market goes down. Advisors often struggle to frame clients’ expectations appropriately. It’s hard to understand someone’s true risk tolerance and educate them about traditional asset classes such as stocks and bonds. There are investment professionals who don’t even understand crypto. Are your communication skills that advanced?

Volatility brings out the grim reaper in clients. When they see red marks on the screen, their emotions may take hold and overcome logic. Are you prepared to handle this? How well do you do with extreme emotions yourself – do you have guts of steel? Do you have emotional support for yourself when the hard times hit?

Emotions aside, it may require a great deal of energy just to educate clients about cryptocurrency. It can get very technical. Are you an intellectually patient person? Do you mind having to explain the same thing over and over? Do you have sufficient financial advisor marketing and communication vehicles that you can use as resources to educate, re-educate, answer questions?

Do I see a long term future in crypto, and can I hang in?

The upfront investment in becoming a cryptocurrency financial advisor may be large. But at the same time, it’s not fully adopted by the world and there are some really intelligent people who deny that crypto has any real value at all. If the whole thing were to falter tomorrow, would you ride it out? Are you committed to hang in there through thick and thin, whether it be wide swings in pricing, regulatory changes, taxation changes, etc. Or are you just dipping your toe in the water? What’s the fallback plan if this doesn’t work out?

This list is by no means complete, as every financial advisor’s practice is different. These are just some questions to get you started.

Sara’s upshot on becoming a cryptocurrency financial advisor

What’d ya think? Was this helpful?

If yes…

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Thanks for reading. I hope you’ll at least join my weekly newsletter about financial advisor lead generation.

See you in the next one!

-Sara G


Grillo Investment Management, LLC does not guarantee any specific level of performance, the success of any strategy that Grillo Investment Management, LLC may use or mention in any of its content, or the success of any program it may mention in any of its content.

Grillo Investment Management, LLC will strive to maintain current information however it may become out of date. Grillo Investment Management, LLC is under no obligation to advise users of subsequent changes to statements or information contained herein. This information is general in nature; for specific advice applicable to your current situation please contact a consultant or advisor.

I want to be clear that nothing in this podcast or blog can be interpreted as an investment recommendation of any type. I have no financial affiliation with HeightZero or any other company mentioned in this podcast or blog. Do your own research before investing and do not interpret anything in this blog or podcast to be a recommendation specific to you, your situation, or any clients of yours.

Also, nothing in this podcast or blog can be interpreted as legal or compliance advice. For advise on such matters, contact a legal or compliance advisor.

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