Bank of America has joined other large institutions in expanding access to cryptocurrencies, with the wirehouse allowing Merrill Lynch advisors to include certain crypto exchange-traded products in client portfolios.
As of Jan. 5, Merrill Lynch advisors can recommend four crypto ETPs, including the Bitwise Bitcoin ETF, Grayscale Bitcoin Mini Trust, the Fidelity Wise Origin Bitcoin Fund, and the iShares Bitcoin Trust. These ETPs will be covered by Merrill’s chief investment office.
In addition, the firm will provide an implementation and asset allocation guidance paper and new training for advisors, which will be required to participate.
The products will be available in traditional brokerage accounts, certain fee-based accounts and certain retirement accounts across Merrill, Bank of America Private Bank and Merrill Edge. There are no net worth requirements for clients to invest.
“This update reflects growing client demand for access to digital assets,” said Nancy Fahmy, head of Investment Solutions Group for Merrill and Bank of America. “By introducing CIO coverage, training and providing allocation guidance, we’re equipping advisors with the tools needed to meet evolving client interest in an informed way.”
In an asset allocation guidance paper, the firm said crypto assets could be considered as satellite holdings for investors with appropriate risk tolerance and interest and that a small allocation would provide meaningful exposure.
“For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate,” CIO Chris Hyzy said in a statement. “Our guidance emphasizes regulated vehicles, thoughtful allocation and a clear understanding of both the opportunities and risks.”
Merrill Lynch has allowed bitcoin ETFs for qualified clients on an unsolicited basis since early 2024.
Overall, advisors have been cautious about using the products from the start, either barring their use or only allowing them to be sold at a client’s request after advisors have completed the required training on the usage of spot Bitcoin ETFs. They have taken the same stance on spot Ethereum ETFs.
This follows news earlier this week that Vanguard would lift its ban on crypto funds, allowing the trading of select third-party crypto ETFs and mutual funds through a Vanguard brokerage account. However, the asset manager stressed that it would not be launching its own crypto products.
In October, Morgan Stanley told its advisors that it was dropping restrictions on recommending crypto funds to clients, according to CNBC.
