Gen X and millennials have lived most or all of their adult lives with the Internet. They have gotten used to having all their services on demand and having the ability to check everything related to facts and prices.
Price control became the norm with financial advisors over a decade ago, leading to the rise of robo advisors. Many consultants kept telling themselves that they could not be replaced by a computer.
But robo advisors currently have over $ 100 billion in assets under management (AUM) and the average age of investors is well below 40. Those investors haven't seen the need to pay more than 1% to financial advisors. just to underperform the market.
Today, most advisors would never tell their clients to allocate more than 5% of their portfolio to cryptocurrencies. But the lesson from the past teaches that if Gen X and millennial investors want a certain way of invest, save or transact, they will find it and help in dictating rates and services. Cryptocurrencies are likely to represent the next investment frontier.
How do Gen X and millennials invest?
According to CB Insights, 33% of millennials do not think they need a bank and 83% express openness to alternative investment strategies. Currently, the age group with the most bitcoin investors is 25-34, according to Grayscale.
However, the average age of those interested in bitcoin is 42! What you see is a group of smart investors with growing incomes and wealth who know what they want to invest in and are very cautious about paying extra fees.
Cryptocurrencies give financial advisors a chance to offer something to those younger investors that many advisors can't or don't want to talk about. More than half of Grayscale respondents said they would be more motivated to invest in bitcoin if their advisor recommended it. The cryptocurrency industry can adapt to changing pricing structures and service offerings.
Financial advisors should consider cryptocurrencies more
For consultants offering subscription, flat-rate, hourly, or project-based services, crypto solutions fit very well. Having professional support in understanding, buying, and securely storing cryptocurrencies is critical for retail investors.
Cryptocurrencies also grant advisors the opportunity to offer alternative investments to clients who would otherwise not qualify as accredited investors. From protocol tokens to Reg A + offerings, cryptocurrency investing can be viewed as a highly liquid alternative risk asset with minimal initial capital, in which this generation is much more open to investing.
Bitcoin and other cryptocurrencies have had a great year in terms of recognition and adoption. Bitcoin has made significant gains over traditional indices such as the S&P 500, while PayPal is preparing a payment function for cryptocurrencies, proving that these aren't just for the dark market.
