How to Attract Crypto Investors as Clients
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Cryptocurrency is growing in popularity, with more than 10% of those surveyed in a recent CNBC poll saying that they've invested in crypto. Investors cite the ease and excitement of trading, as well as the potential for short-term earnings, as their reasons for buying cryptocurrencies. While many are drawn to crypto for the immediate benefits, survey data shows that 60% of crypto investors are interested in long-term growth as well.
This presents an opportunity for financial advisors to attract these investors as clients. Crypto investors are focused on an asset class that is volatile but showing long-term potential, and few of them have a personalized financial plan. Advisors need to understand how crypto markets work and how to make crypto part of a balanced portfolio to take advantage of this opportunity.
Benefits of a financial planner over an investment advisor
While the distinction between the titles financial planner and investment advisor isn't clear cut, marketing yourself as a financial planner has several benefits, especially for crypto clients. These clients need a long-term, holistic strategy that considers their personal financial goals and guards against the volatility of crypto markets.
Investment advisors tend to focus more narrowly on investments, which is probably where a crypto investor's attention already is. Considering investments as part of a lifelong, big-picture plan is essential for financial security.
How a planner can help crypto investors
A good planner can help crypto clients get the most out of their investments. Investors should have a plan to minimize their tax burden. Investors can offset taxes on other assets with crypto losses while avoiding wash-sale rules. However, legislators are working to change this policy, so advisors need to stay up to date on the best tax strategy for crypto investors.