RIAs are not extreme risk takers when it comes to the trust they have established in their client relationships. An advisory business takes years to build and is only as secure as the confidence clients place in it.
If there’s one thing that can quickly undermine that trust, it’s needless risk.
For RIAs, the crypto (or “digital asset”) industry has traditionally been rife with exactly that: needless operational, legal and regulatory risk. At the same time, clients are asking for greater access to digital assets. Surveys—including those from well-established institutions like Bank of America and Charles Schwab—indicate a growing percentage of investors want exposure to digital assets.
These demands places RIAs in a precarious position where the very thing they need to grow their business—offering access to digital assets—threatens to undermine it at the same time.
Seeking solutions, the same surveys invariably cite “regulatory concerns” as the number one barrier to entry. Take the 2025 Bitwise and VettaFi digital asset survey, for instance:
Despite regulatory concerns topping the list every year, what’s missing from these surveys is a tangible discussion on what these concerns are or how firms might navigate this environment. Instead, the same Bitwise and VettaFi 2025 survey offers up a 1-2 sentence analysis citing “clearer regulation” as the antidote:
This survey is just one example of a broader lack of true insight on this issue. How can any executive team use this for decision-making? The unfortunate elephant in the room is that the answer to the “regulatory concerns” question pushes the majority of RIAs away from investing in this asset class.
In practice, “regulatory concerns” isn’t a vague catch-all; it’s a direct business impediment to offering certain asset classes.
Based on my experience and discussions with RIA executive teams, here are three critical, real-world roadblocks that explain why many RIAs remain on the sidelines.
What Am I Actually Trading?
RIAs need legal clarity on what’s being traded because their operational framework is built around traditional asset classes. An ambiguous “quasi-security” token doesn’t cut it. Until there’s a definitive classification—something that can be processed, reported, and stored under the same protocols used for securities—most advisors simply won’t touch it.
Big crypto likes to argue and give legal opinions on the status and classifications of its tokens. However, RIAs do not put their client relationships at risk based on legal opinions, and RIA executive teams do not build businesses based on those opinions. They will happily wait until such legal frameworks are written and codified into law.
Counterparty Risk from Financial Intermediaries
It’s industry best practice—effectively CYA for an RIA—to partner with properly licensed custodians, broker-dealers and other financial intermediaries. Under federal securities laws, these entities must comply with the Customer Protection Rule (Rule 15c3-3), which safeguards client assets by requiring broker-dealers to segregate customer funds and securities from their own and to return them promptly upon request. While this does not eliminate all risks associated with corruption or insolvency, partnering with entities subject to these rules helps mitigate potential concerns for RIAs when managing client assets and fostering client trust.
Unfortunately, there is a lack of SEC-registered intermediaries in the U.S. market, as most legacy crypto platforms opted for state licenses or money transmitter licenses—opening up too much risk for most RIAs and their clients.
Internal Compliance Policies and Procedures
At any SEC-regulated advisory firm, robust internal compliance controls are paramount. Advisors must demonstrate they aren’t front-running clients, that all trades align with fiduciary obligations, and that records are easily auditable. But crypto trades 24 hours a day, 7 days a week, 365 days a year, creating a nonstop cycle that traditional compliance systems are ill-equipped to handle. Building and staffing a round-the-clock monitoring framework, integrating new recordkeeping tools and ensuring robust oversight of emerging markets is a massive undertaking. Until digital assets are a need-to-have, and not a nice-to-have, RIAs will hesitate to invest in overhauling their internal compliance process and policies.
Trusted Sources
To truly understand what “regulatory concerns” mean, survey practitioners should go straight to the professionals where it matters the most—the CIOs, compliance officers, and operations executives who are the gatekeepers to any new investible asset classes. If a survey doesn’t capture their perspective, the results—as we have seen—paint an incomplete (and often overly optimistic) picture of advisor sentiment.
The next time a crypto survey highlights “regulatory concerns” as a barrier to entry, dig deeper. What concerns? Has the sponsor mapped out potential solutions? Advisors need clarification on asset classification, counterparties they can rely upon, and turnkey internal compliance procedures as a starting point for any crypto conversations. Until then, the trust an RIA has with clients will trump any near-term demand around emerging investment products.
