Fidelity says that as crypto goes mainstream and proves its longevity, more customers are asking their financial advisors about the benefits and risks of these investments. The firm is now advising advisors to help clients navigate the intricacies of investing in crypto.
Fidelity Claims Digital Assets Are Becoming More Common in Advisor-Client Conversations
The Facts:
Fidelity, a financial counseling and brokerage firm with over $16.4 trillion in assets under management (AUM), claims that talks of digital assets as investment tools are sparking more frequently between financial advisors and their customers.
Fidelity Digital Assets, Fidelity’s subsidiary dedicated to these investments, posted on social media that these conversations have become increasingly common, and advisors should be prepared to guide their customers in deciding whether to invest in crypto or to pass on it.
For Brian Murphy, founder of Pariveda Investment Management, and Jackson Wood, portfolio manager at Freedom Day Solutions, the most frequently asked questions revolve around three key subjects. These are the volatility of digital assets, the selection of which digital assets to invest in, and custody of these assets.
Fidelity explains that while some might consider bitcoin a volatile asset, it has been, in fact, less volatile than some of its stock counterparts, including Meta, NVIDIA and Tesla.
On the question of which digital assets to invest in, Fidelity views bitcoin as an entry point for traditional allocators, highlighting that it is “fundamentally different than any other digital asset available today.”
Finally, investors must also direct customers to determine whether to exert self-custody over these assets or trust the management to a custodian.
Why It Is Relevant:
Financial firms like Fidelity can become the starting point for crypto investments for hundreds of thousands of customers interested in these options. As digital assets’ talk as investments has been growing, it is crucial for advisors to chat with their customers to help them pinpoint the benefits and drawbacks of these.
Fidelity and other financial firms can become a catalyst for bitcoin and other crypto assets to become a more generalized option for retail and institutional investors.
Looking Forward:
As the crypto asset class keeps growing in recognition, analysts expect more people to enter the crypto investment arena. Financial advisors must be ready to channel customer interest and offer the most relevant choices, explaining the actual risks associated with digital assets.
FAQ 🧭
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What recent trend has Fidelity observed regarding digital assets?
Fidelity reports that conversations between financial advisors and clients about digital assets as investment tools have increased significantly. -
What key questions do financial advisors often receive about digital assets?
Advisors frequently address inquiries about the volatility of digital assets, which ones to invest in, and the options for custody. -
How does Fidelity characterize Bitcoin’s volatility compared to stocks?
Fidelity notes that bitcoin has demonstrated less volatility than some major stocks, including Meta, NVIDIA, and Tesla. -
Why is Fidelity’s role important for digital asset investments?
As a leading financial firm, Fidelity can help guide thousands of clients in navigating the complexities of crypto investments, potentially paving the way for broader acceptance among retail and institutional investors.