Advisers can now pitch crypto funds to anyone, including those with retirement accounts like IRAs and 401(k)s.
Crypto News
Major wealth manager Morgan Stanley is opening cryptocurrency access to all clients starting Oct. 15, removing previous restrictions that only let wealthy investors participate.
Advisers can now pitch crypto funds to anyone, including those with retirement accounts like IRAs and 401(k)s. Before this change, only clients with at least $1.5 million and aggressive risk profiles could access these investments.
This could unlock huge amounts of money for crypto. American retirement accounts hold about $45.8 trillion total, with IRAs containing roughly $18 trillion and 401(k) plans holding around $9.3 trillion, based on Investment Company Institute numbers.
Morgan Stanley's wealth division has about 16,000 financial advisers managing approximately $6.2 trillion in assets for over 19 million clients. That's a massive potential audience for crypto products.
For now, advisers can only offer Bitcoin funds from BlackRock and Fidelity. The firm plans to watch for other crypto products while using automated systems to make sure clients don't go overboard with risky investments.
Financial planner Clifford Cornell at Bone Fide Wealth said the right crypto amount really depends on each person's situation. He suggested people interested in alternatives beyond stocks and bonds might set up separate "opportunity portfolios" instead of following one-size-fits-all advice.
Edward Hadad, a financial planner with over 15 years of experience at Financial Asset Management Corp., recommends keeping speculative assets like crypto or gold under 5% of your total portfolio. He stressed the importance of making sure your main financial goals stay achievable, even with some speculation.
Morgan Stanley's investment committee put out guidance in October saying high-risk portfolios could go up to 4% in crypto, balanced strategies up to 2%, and conservative approaches should avoid it completely. They called crypto speculative but increasingly popular, comparing Bitcoin to digital gold.
BlackRock previously suggested 1% to 2% Bitcoin allocation last year, while Fidelity writers mentioned 2% to 5% might work for most people, possibly reaching 7.5% for younger investors. These recommendations from major institutions show crypto is becoming more accepted in traditional finance.
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