Morgan Stanley Recommends Up to 4% Crypto Allocation for Clients
Morgan Stanley’s wealth unit advises clients to cautiously allocate a small percentage of their portfolios to cryptocurrencies:
- Recommended crypto allocation: up to 2% for conservative portfolios, up to 4% for growth-oriented ones.
- For income-focused or capital preservation accounts, the recommendation is 0% crypto exposure.
Crypto as Speculative Investment
- Crypto is categorized under "speculative" investments in portfolio planning.
- Advisors are encouraged to use exchange-traded products (ETPs) for simpler custody and reporting.
Managing Crypto Exposure
- Regular rebalancing is advised to prevent significant increases during rallies.
- Allocations should align with client goals rather than market price movements.
Increasing Access to Crypto Trading
- Morgan Stanley plans to enable crypto trading for E*Trade clients through a partner platform.
- Initial support will be available for Bitcoin, Ethereum, and Solana.
Market Reaction
- The guidance reflects a cautious approach amid regulatory and volatility concerns.
- Morgan Stanley’s stance contributes to setting norms among large wealth managers.
The firm emphasizes that crypto remains a niche allocation suitable only for those comfortable with significant risk.