Crypto’s Renewed Relevance For Wealth Management: Is Your Firm Prepared?

Crypto’s Resurgence Prompts Multiple Strategic, Operational And Legal Considerations

Talk about a roller coaster ride of relevance!  Over the past few years, crypto has gone from the next big thing, to the next big bubble about to burst, only to regain a high degree of relevance for the wealth management industry once more.

With that said, crypto investing remains one of the more hotly debated topics in for both RIA firms and dual registrant enterprises. 

While some firms are hesitant to engage further due to certain areas of regulatory uncertainty, others recognize the growing demand from clients – particularly younger investors – who see digital assets as a key part of their portfolios.  In many respects, crypto as an asset class arguably poses a very significant dilemma to the RIA channel in particular.

Fitting Within A Fiduciary Framework

As wealth transfers to the next generation, RIAs must be prepared to address these conversations and determine how crypto fits within a fiduciary framework.

Investor interest in crypto is driven by multiple factors, from the potential for high returns to the increasing legitimacy of digital assets within mainstream finance. However, RIAs must balance this enthusiasm with their duty to act in clients’ best interests, ensuring that crypto strategies align with long-term financial plans.

A more permissive regulatory environment could accelerate RIA adoption of crypto solutions. As oversight frameworks evolve, firms exploring digital assets should assess whether crypto investments align with client goals, risk tolerance, and liquidity needs. 

Views From Industry Leaders

I spoke with three industry leaders to better understand what firms can take in providing education and dedicated support essential in bridging the gap between traditional finance and digital assets:

• Miguel Kudry, CEO and co-founder of L1, a provider of onchain crypto wealth and asset management solutions for financial advisors
• Kimberly Papedis, CFP®, CEO and president of Fusion Financial Partners, a strategic consultancy focused on driving growth for RIA firms
• Kris Swiatek, partner at Seward & Kissel LLP, a corporate law firm with expertise in serving client companies across financial services, corporate finance and capital markets

The Rise Of Self-Custody Solutions

Sander Ressler: My first question goes to Miguel Kudry of L1.  With growing concerns over centralized exchanges and custodial risks since the collapse of FTX, more investors are turning to self-custody solutions. How should wealth managers adapt to this shift, and what role can they play in guiding clients who want greater control over their digital assets?

Miguel Kudry: The collapse of FTX and Three Arrows Capital in 2022 sent shockwaves through crypto and traditional finance, highlighting the importance of custody. In response, many investors are turning to self-custody solutions, eliminating reliance on third parties for asset security.

Beyond security, self-custody unlocks access to Decentralized Finance (DeFi), enabling participation in onchain protocols like exchanges, lending, staking, and tokenized assets. This ecosystem offers financial opportunities unavailable through traditional custodians.

The shift to self-custody signals a broader change in investor expectations. Onchain rails provide efficiency and control, making traditional finance feel outdated. Wealth managers must recognize this trend, as more clients opt to keep a larger share of their portfolios onchain for better access and autonomy.

This rising demand for onchain services is driving major asset managers toward tokenization, recognizing blockchain’s efficiencies and cost savings.

For wealth managers, guiding clients through self-custody involves helping them choose the right wallets, discussing cybersecurity, private key management, and redundancy strategies. Multi-signature wallets, for example, allow clients to maintain control while advisors provide backup access.

Self-custody also fosters deeper engagement with younger, self-directed investors. Millennials and Gen Z are more hands-on with their wealth, and crypto conversations can help wealth managers understand their financial preferences. As baby boomers transfer wealth to heirs, those embracing self-custody will be better positioned to serve the next generation.

By adapting to this shift, wealth managers can stay relevant, offering security, guidance, and strategic insights for clients seeking greater control over digital assets.

RIA Firms And Crypto Solutions

Sander Ressler: Next up, I’d like to hear from Kimberly Papedis about how RIA firms specifically are approaching crypto.  In your experience, to what extent are most RIA firms currently focused on including crypto investment solutions on their platforms?  Do you see a more permissive regulatory landscape for crypto increasing the level of activity RIA firms have in aligning crypto solutions with their end clients, and if so, what are the key criteria that crypto firms should bring to the table for RIAs to consider including them on their investment solutions platforms? 

Kimberly Papedis: This is a great discussion. Today, crypto investing ignites one of the most divisive debates in the RIA community as any asset class. In my experience, the younger generation of clients, who bring different risk tolerances, financial goals, and a belief in digital assets are pushing this conversation to the forefront. Because of this, advisors are pressed to have an opinion – and, if they seek to attract younger generation investors who are first-generation wealth creators or recipients of the massive intergenerational wealth transfer underway – and must entertain this as a possible investment. 

There are several reasons investors are showing interest here such as the high potential returns – actually, significant gains in short periods, “legitimizing†of the asset class by being offered through trusted institutions such as Fidelity, BlackRock, and Tesla, or simply due to FOMO. 

RIAs are legally obligated to act as fiduciaries, usually with a long-term investment plan and placing client interests first, which makes it challenging to justify crypto investing in a fiduciary framework. Crypto firms can help “mainstream†this conversation in the RIA community by demonstrating adherence to regulatory compliance (AML), supporting institutional-grade security protocols, commitment to transparency and reporting to support the fiduciary standards of RIAs, and dedicated support and educational resources. 

By showing a willingness to understand the uniqueness of the RIA industry, crypto firms can position themselves as viable partners to RIAs and increase the likelihood of adding digital assets to traditional investment portfolios.

Top Legal Priorities To Consider

Sander Ressler: In my view, no meaningful conversations about the intersection of wealth management and crypto is possible without the perspectives of an experienced attorney.  So my last question is directed to Kris Swiatek of Seward & Kissel, LLP.  Kris, what do you see as the top legal priorities to consider for wealth management enterprises as they explore the addition of crypto investment solutions and strategies to their product platforms over the course of 2025 and beyond?

Kris Swiatek: The shifting U.S. stance on crypto investing is welcome news for wealth management firms eager to explore this asset class. However, regulatory clarity is still a work in progress. As Commissioner Peirce noted, the SEC awaits Mr. Atkins’ confirmation as chair to lead the agenda, leaving key questions — such as whether crypto tokens are securities and how firms can custody them unresolved.

This uncertainty doesn’t mean firms can’t execute direct crypto strategies, but compliance remains an uphill battle. Existing challenges, including ethical considerations and custodial arrangements, require careful analysis. The good news? The SEC’s crypto task force is already addressing these concerns.

In the meantime, firms should focus on two key areas. First, they should develop policies to identify clients for whom crypto exposure is appropriate, factoring in volatility and liquidity risks. Second, they can offer indirect exposure through exchange-traded products, assessing whether BTC and ETH investments align with clients’ needs.

Additionally, firms should start crafting policies for direct crypto offerings, especially for strategies beyond spot investing. Preparing now ensures they’ll be ready to act when regulatory clarity improves. With the right approach, firms can navigate the evolving landscape and position themselves for long-term success in digital assets.

Sander Ressler is Managing Director of Essential Edge, a strategic consultancy specializing in compliance and regulatory affairs for broker-dealers and registered investment advisers (RIAs)